GRPN Up AH on Earnings, closing at 13.81 (11.11-13.910)
Groupon results buoy investors' spirits BY MarketWatch— 7:19 PM ET 05/14/2012
SAN FRANCISCO (MarketWatch) -- After being the scourge of Wall Street at the end of March with yet another accounting issue, Internet daily deal pioneer Groupon Inc. (GRPN) has redeemed itself, at least for a day.
On Monday, Groupon's (GRPN) first-quarter results were better-than-expected and the company's outlook for the second quarter was also strong. In after-hours trading, the company's shares soared nearly 18% to $13.80. On Friday, its shares closed just below $10, at $9.90.
Its shares have been volatile since March 30, when Groupon (GRPN) restated its results, and said its auditors said it found material weakness in its internal controls, raising renewed questions about the young company's credibility.
On Monday, though, investors were cheered by the company's better results, a drop in marketing expenses and better traction in mobile than some of its rivals. Its overall expenses, though, grew in the quarter as Groupon (GRPN) hired more than 1,000 workers.
Groupon (GRPN GRPN GROUPON INC 11.735 Change +1.835 (+18.54%) AS OF 4:00 PM ET 05/14/12.) had been a favorite stock among short sellers, investors who bet on a stock's decline. As of April 30, according to the NASDAQ, 17.4 million shares of Groupon (GRPN) were held short, a relatively small percentage of the company's total 644 million shares outstanding. Still there is possibly some short covering going on amid Monday's optimism.
Chief Financial Officer Jason Child also said that Groupon (GRPN) was making progress in dealing with its auditing problem, saying that it changed its refund methodology and hired more people to help deal with controls, and confirmed that the company hoped to clear up the issue by year end.
"The actual removal [of the statement of a weakness in internal controls] will not disappear until the year-end audit, but we feel very good about the progress we have made so far," Child said.
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