Why Groupon Stock Fell Over 9% at the Open Today
Shares of Groupon (NASDAQ: GRPN), which bills itself as an experiences marketplace, fell over 9% at the open of trading on March 1. The big news driving the decline was the company's fourth-quarter 2021 earnings release, which hit the market after the close on Feb. 28. There was both good and bad in the quarterly update.
Groupon reported revenue of $223.2 million in the fourth quarter of 2021, down a huge 35% from the same quarter of 2020. However, that number isn't necessarily helpful because management has changed the company's business model. It is no longer selling physical items through its online service, which boosted revenue and costs on the company's income statement. It is now selling coupons for food and other services. The top line drop was, basically, part of the plan and comes with lower costs, with cost of revenue falling a huge 83% year over year. This is a big shift and muddies the waters when you try to look at what's actually going on at the company. On a positive note, the company's business of connecting local retailers to local customers (via the coupons it sells) grew 26%.
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Source Fool.com