Groupon plunges following Tiger Global's revelation of slashed stake
The shares of Groupon Inc, a provider of daily deals, slumped after Tiger Global Management LLC cut its stake in the company.
Groupon stocks fell by 4.2% to USD9.78 at the end of the trading session in New York. Since the initial public offering of the Chicago-headquartered Groupon in November 2011, it already lost half of its worth. The decrease in its value transpired even if this year, the shares have more than doubled due to optimism that its sales would bolster through discounts aimed at the users of smartphones and tablets.
According to Tiger's regulatory filing yesterday, it slashed its venture capital by 72% to 18 million shares during the second quarter. Telsey Advisory Group's analyst, Tom Forte, said Tiger's move suggested that it sees limited potential for the stock of Groupon to keep on boosting.
"Groupon had a tremendous run in a short period of time and Tiger made some incredible gains," Forte, who currently has a USD13 target price on Groupon's stocks, said. "They may feel like they have more upside in another stock, so they may be reallocating Groupon profits into another stock with more potential for upside."
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