Groupon: Divisadero Street Capital Management, LP Reduces Stake in Groupon Inc

Transaction Overview On December 31, 2024, Divisadero Street Capital Management, LP ( Trades , Portfolio ) made a significant move by reducing its stake in Groupon Inc ( GRPN , Financial ). The firm decreased its holdings by 1,550,370 shares, marking a -59.73% change in its position. This transaction left Divisadero Street Capital Management with 1,045,472 shares of Groupon, which now represents 1.58% of the firm's portfolio and 2.60% of its holdings in Groupon. The shares were traded at a price of $12.15 each, slightly below the current market price of $12.73. About Divisadero Street Capital Management, LP ( Trades , Portfolio ) Divisadero Street Capital Management, LP ( Trades , Portfolio ) is an investment firm based at 444 Brickell Avenue, Miami, FL 33131. While the firm's specific investment philosophy is not detailed, its portfolio consists of 74 stocks, with top holdings in companies such as Abercrombie & Fitch Co ( ANF , Financial ), Carvana Co ( CVNA , Financial ), Vital Farms Inc ( VITL , Financial ), Rush Street Interactive Inc ( RSI , Financial ), and SharkNinja Inc ( SN , Financial ). The firm manages a total equity of $824 million, with a focus on the Consumer Cyclical and Healthcare sectors. Groupon Inc: Company Profile Groupon Inc operates as an intermediary, offering discounted products and services through its online platform. The company is organized into three segments: Goods, Local, and Travel, with the majority of its revenue generated in North America. Groupon's market capitalization stands at $506.245 million, and its stock is currently priced at $12.73. Since its IPO on November 4, 2011, the stock has experienced a significant decline, with a price change of -97.73% since its initial offering. Financial Metrics and Valuation Groupon's financial metrics reveal a mixed picture. The company has a Price-to-Earnings (PE) ratio of 19.29, indicating a relatively high valuation compared to its earnings. According to the GF-Score , Groupon is significantly overvalued, with a GF Value of $6.74, resulting in a Price to GF Value ratio of 1.89. Despite a year-to-date price increase of 6.08%, the stock's performance since its IPO remains deeply negative. Performance and Growth Indicators Groupon's GF Score of 47/100 suggests poor future performance potential. The company's Balance Sheet Rank is 4/10, while its Profitability Rank and Growth Rank are 3/10 and 2/10, respectively. Over the past three years, Groupon has experienced a revenue decline of -30.70%, although its earnings have grown by 34.00% during the same period. Additional Financial Ratios and Rankings Groupon's financial health is further illustrated by its interest coverage ratio of 2.18 and a cash to debt ratio of 0.69. The company's Operating Margin growth remains stagnant at 0.00%, while its gross margin has grown by 14.50%. Notably, Groupon's Return on Equity (ROE) is exceptionally high at 308.46%, although its Return on Assets (ROA) is a modest 3.46%. Market Sentiment and Momentum Market sentiment around Groupon indicates overbought conditions, with a 14-day Relative Strength Index ( RSI , Financial ) of 71.29. The stock's momentum indices, however, show negative trends, with a 6-month momentum index of -10.91 and a 12-month momentum index of -29.52, suggesting potential challenges in maintaining upward price movement. Conclusion: Impact of the Transaction The reduction in Groupon shares by Divisadero Street Capital Management, LP ( Trades , Portfolio ) reflects a strategic decision to decrease exposure to this stock, impacting the firm's portfolio by -2.29%. Despite this reduction, Groupon still holds a 1.58% position in the firm's portfolio and accounts for 2.60% of its holdings. This transaction highlights the firm's ongoing evaluation of its investment strategies and market conditions. This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.