Groupon narrows loss, stock price surges
Groupon, the online coupon giant, Monday reported a loss in the first quarter of $11.7 million, but markets welcomed news of sharp increase in revenues.
The Chicago-based firm which offers discounts for a variety of goods and services said revenue increased 89 percent from the same period a year ago to $559.3 million and gross amounts collected from customers jumped 103 percent to $1.35 billion.
"We are pleased to report a record quarter that demonstrates our progress in unlocking the opportunity in local commerce for merchants and customers worldwide," said Andrew Mason, chief executive.
Shares in Groupon surged more than 12 percent in after-hours trade on the news.
Excluding special items and required accounting provisions, the company showed a profit amounting to two cents a share.
Earlier this year, Groupon saw its stock price sink as word spread that it overstated its quarterly earnings, a move reportedly being scrutinized by US regulators.
Groupon said in prior quarters it had underestimated operational costs and money needed to pay refunds for more expensive deals, which buyers are more likely to return.
Groupon made its stock market debut at $20 per share in November and peaked above $31 dollars a share.
Groupon in February issued its first earnings report as a publicly traded company, saying it failed to turn a profit despite revenue nearly tripling from a year earlier.
Groupon shares were listed on the Nasdaq on November 4 in a blockbuster public offering that raised a whopping $700 million and triggered fears that investors may be foolishly overvaluing hot Internet startups.
Groupon, which rejected a $6 billion takeover offer from Google a year ago, has enjoyed phenomenal growth since its founding in 2008 but has been dogged by questions about its business model and accounting methods.
© 2012 AFP