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Groupon (GRPN) reveals transformation plans as stock performance points to an impending positive turnaround

Groupon (GRPN) reveals transformation plans as stock performance points to an impending positive turnaround
In the months of May and June, shares of Groupon (NASDAQ: GRPN) have returned to over 73% to investors.

In the months of May and June, shares of Groupon (NASDAQ: GRPN) have returned over 73% to investors. These are encouraging signs of a recovery for this major player in the e-commerce industry, which has recently revealed its transformation plan to revamp Groupon and reposition it for future expansion.

According to Groupon’s first quarter 2023 financial results, it will have saved $250 million in annualized costs by the end of 2023. Approximately 18.2 million customers were active on Groupon at the end of the first quarter, down from 22.2 million at the same time last year. International Active Local Customers grew year-over-year for the fifth consecutive quarter.

The second stage of Groupon, Inc.’s multi-phase restructuring plan, which is a component of the company’s comprehensive cost-savings plan, was approved by the board of directors on January 25, 2023. To reduce expenses, Groupon announced last week that it had reduced its workforce by another 500 employees. In August 2022, the e-commerce company cut 500 jobs or about 15% of its total workforce. According to the company’s SEC filing, the job cuts will result in annual cost savings of millions.

The Company also intends to carry out additional non-payroll actions outlined in the 2022 Cost Savings Plan, such as lowering costs associated with professional services, technology, and software. Additional annualized cost savings of $30.0 million are anticipated as a result of these actions.

Groupon has approximately 20 million customers. More than 15 million of these users have been on the platform for five years or longer. The majority of users are active buyers and sellers on the platform. Sometime back, Prescience Point had said that this information demonstrated that the business was a force to be reckoned with. Market analysts also noticed that Groupon’s core business was undervalued.

By putting more of an emphasis on lower funnel performance channels and switching from incrementality to ROI targets in Q1, Groupon increased the effectiveness of its marketing expenditure. This led to advances in efficiency, particularly in search engine marketing, and a decrease in marketing expenditure as a percentage of gross earnings. Before shifting back to mid- and upper-funnel channels, Groupon is now concentrating on increasing returns in performance channels.

Groupon thus continues to move towards its vision to create a marketplace where customers can purchase goods and services that add value to life and make it more interesting.

Etsy is currently trading at $90; Target (TGT) is trending around $140, Wish is trading around $8, and Groupon is trading currently at $6.20.

Groupon shows signs of its ability to bounce back by the end of 2023, which makes it worthwhile to keep an eye on its movements.

Disclaimer: It should be expressly understood that under no circumstances does any information published herein represent a recommendation to buy or sell a security. The information made available by CWEB is not intended to be, nor does it constitute, investment advice or recommendations. In no event shall CWEB be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or made available by CWEB, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. CWEB strongly urges you conduct a complete and independent investigation of the respective companies and consideration of all pertinent risks. Readers are advised to review SEC periodic reports: Forms 10-Q, 10K, Form 8-K, insider reports, Forms 3, 4, 5 Schedule 13D. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as projects, foresee, expects, will, anticipates, estimates, believes, understands, or that by statements indicating certain actions & quote; may, could, or might occur. Investing in micro-cap and growth securities is highly speculative and carries an extremely high degree of risk. It is possible that an investor's investment may be lost or impaired due to the speculative nature of the companies profiled.

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