Technology Stocks

Groupon Inc (NASDAQ:GRPN) Exposed for Misleading Customers in the wake of a new agreement with AMC Theatres

An investigation by which? Has exposed Groupon Inc (NASDAQ:GRPN) for allegedly dubbing shoppers in some of its offers. Why? Has warned shoppers that not all deals posted on Groupon’s site are genuine. Why? Sampled deals available on the platform between the months of October and November. Comparison for the original prices and deal prices with those available on other sites revealed that a couple of deals on Groupon were misleading.

Although most deals available on the site were genuine, however, the investigation revealed 14 instances of cheating. In some cases for instance, Groupon indicated an exaggerated pre-discount price that gave the deal a surprisingly great outlook.

Outright Con

In another outright case of cheating, Groupon posted a deal that was in actual sense available elsewhere at a remarkably cheaper price. For example, Trio-fold mirror selling at £100 on Groupon was available for £35 from the product’s official retailer. Another case of treachery is where a Cocktail mastreclass at London was going for £16 down from an original £50 while in the actual sense the £16 was its standard price at the provider’s website.

Distribution Agreement with AMC Theatres

The news of Groupon’s mischief comes barely a week after the company signed a distribution agreement with AMC Theatres (NYSE: AMC). Pursuant to the terms of the agreement, Groupon’s moviegoers will get real-time movie updates and have access to great movies exhibited across AMC’s theatres across the US. Partnering with AMC could increase Groupon’s sales on movie offers. Groupon has reportedly sold over six million movie offers in North America in 2 years.

Speaking about the partnership, Brian Fields, Head of things to do at Groupon said, “Partnering with AMC helps us bolster an already strong category for Groupon. This integration furthers our mission of becoming the daily habit in local by connecting people with more entertainment choices in their community. Going to the movies is the quintessential local experience.”

Groupon’s Financials

Groupon posted$592.90 million revenue for its third quarter narrowly missing analysts’ projection of $602.08 million. The revenue slid 6.6% from last year’s for the same quarter. The company nailed a $0.02 earnings per share (EPS) topping Zack’s forecast of $0.03. However, Groupon lagged in net margin registering a negative of 0.35% with a positive return on equity of 11.15%.

Groupon’s stock

Groupon’s stock has been hovering below $5 for the better part of this year. Although the stock surpassed the $5 mark along the way, this is still nothing compared to the $20 it began with during the days of its initial public offering. As for the most recent trading session, the stock closed at $2.90m- a $0.09 downgrade from its opening stock.

Source: Stockcharts

About 12.14 million shares were traded during the session against the stock’s average volume of 7.36 million. Over the 52-week period, the stock hit retreated to an all time low of $2.80 and posted a $5.65 high over the same period. As of Friday, 21 December, the company had a market cap of $1.71 million.

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