Groupon Inc (NASDAQ:GRPN): In danger or in Denial?

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By Mark Michaels on August 6, 2014 Consumer Staples

Groupon Inc (NASDAQ:GRPN) is a deal-of-the-day website that offers daily deals and discount certificates for numerous restaurants, hotels, retailers and many more. The company is currently facing quite a difficult time and is agitated as well as confused since the time it decided to transform the present business model. The expectation it has for the upcoming quarter is only proof of how it is speculative regarding its future performances.

Following the introduction of the ‘pull’ program, where users simply log on to the Groupon Inc (NASDAQ:GRPN) website and search for their required deals rather than only visiting the website when they receive a notification for a deal that interests them, the stress for Groupon Inc (NASDAQ:GRPN) still lingers, even though it is significantly less than what it was with the ‘push’ users only. It has been recognized by Groupon Inc (NASDAQ:GRPN) that searches for an estimated 10% of traffic was carried out in North America and these clients were spending considerably more as compared to those who were not.

The predictions made by analysts for the performance of Groupon Inc (NASDAQ:GRPN) were a little higher than what the company turned out to put together. Groupon Inc (NASDAQ:GRPN) obtained a profit of 1 cent per share and acquired revenue of $751.6 million. Experts had looked forward to a profit of 1 cent for every share and revenue of $761.8 million.

In the present quarter, Groupon Inc (NASDAQ:GRPN) spent $106 million and acquired 17.2 million shares that were rated as Class A stock. In August 2013, Groupon Inc (NASDAQ:GRPN) had come up with a repurchasing program according to which they would buy their own stock again in an open market for investment purposes. To date, $118 million remains on this program.

The CEO of Groupon Inc (NASDAQ:GRPN), Eric Lefkofsky has announced in one of his talks with the press that the company had accomplished a remarkable quarter concerning the demand and that they have achieved a consequential high. He also stated that international billings had reached as high as 29% which was the maximum they have ever been. According to Eric Lefkofsky, with the introduction of Gnome in the market, Groupon Inc (NASDAQ:GRPN) had achieved a high in mobile and the growth of the company is being impressive and they are parading their way through establishing a connection within the local industry.

Groupon Inc (NASDAQ:GRPN) hopes that in the third quarter of this year, it shall be able to achieve adjusted earnings per share which would either be 2 cents per share or not exhibiting any profit or loss i.e. the income being exactly equal to the expenditure. Groupon Inc (NASDAQ:GRPN) also hopes for revenue that ranges between $720 million and $770 million. However, analysts are looking for earnings that equal to 3 cents for every share and revenue of $759.7 million.

On Wednesday though, shares for Groupon Inc (NASDAQ:GRPN) were seen to have been descending, taking a fall of 16.1% and now being at $5.93. This proved to be quite a disappointment for the analysts who are now unsure of how the remaining quarters of this year will treat Groupon Inc (NASDAQ:GRPN).