Groupon Shares Tumble on Disappointing Quarterly Results

Shares of e-commerce company Groupon were plunging in after-hours trading on Tuesday after the company posted dismal quarterly results, revealed that it plans to divest part of its business and is planning for a reverse stock split.

The stock dropped 25% as Wall Street digested all of the news.

“We did not deliver the financial performance we expected during the fourth quarter and we recognize we must move swiftly to put Groupon back on a growth trajectory,” Groupon CEO Rich Williams said in a statement.

Groupon reported fourth-quarter earnings of 7 cents per share excluding some items, while analysts had expected earnings of 15 cents per share, according to Refinitiv. The company reported $612 million in revenue which also came in well short of the $709 million that analysts were expecting, according to Refinitiv.

The company is planning to exit the Goods category so it can focus on the $1 trillion “local experiences” market.
Groupon’s board has also approved a reverse stock split at a ratio between 1-for-10 and 1-for-12, the company said. The proposal will be submitted to stockholders at the company’s annual meeting in June.

The stock split is expected to be effective by the end of the second quarter, according to the company’s release this week.

Groupon also revealed that Interim CFO Melissa Thomas will permanently takeover in that position, and Valerie Mosley and Helen Vaid have been added to the Board of Directors.

Shares are down 13% over the last 12 months.

Disclaimer: We have no position in Groupon Inc. (NASDAQ: GRPN) and have not been compensated for this article.