Groupon Shares set to soar

Groupon Shares set to soarGroupon shares have been a great asset for shareholders this year, and some believe they are about to be even better to own. Stock has soared 80 percent so far, and now after reporting better than anticipated growth, the online deals site is set to rally, according to experts. Groupon has also announced it has named one of its co-CEOs as the sole chief of operations.

What has made Groupon better? It has been reinvented. Having gotten much criticism for staking its future on unproven daily deals business models, the space has indeed proved challenging for the company and its mostly defunct rivals. Groupon has worked diligently to reinvent itself with ventures into online retail with Groupon Goods, and by processing credit card payments, Groupon Payments.

It has strong performance in North America, which is boosted by mobile. Analysts and investors pay particular attention to the company’s performance in North America and just last quarter, those customers bought 30 percent more in goods and services from the company compared to the previous year.

Almost 50 percent of Groupon’s transactions were completed on mobile devices during the month of June, which is up by 30 percent from the same month last year. Another plus for the company is a new CEO. In February the company ousted founder Andrew Mason from the position, and since then, Eric Lefkofsky, co-founder who served as chairman, had been running the business on an interim basis before being officially named CEO on Wednesday.

Lefkofsky, a billionaire, possesses a large variety and wealth of business experience when compared with Mason, and analysts seem relieved he has taken control. On Wednesday, the company announced that it will buy back $300 million of its own share over a period of the next two years, which will get the stocks going again.

On a negative note, the international market remains a problem for the company, and it has posted steep declines globally. In the market outside North America, Europe, the Middle East, and Africa has fallen 26 percent during the last year. Investing in overseas marketing, offices and staff can be extremely expensive, and those costs and expansions are yet to pay off for the company outside Europe.

Groupon has however, ruled over the market of daily deals. The company’s reinvention has plunged it into slots that are filled with competition already. Group Goods is left to compete with Amazon, eBay, Overstock and dozens of other competitors.

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About the author

Ryan Burgas is a regular contributor covering business and finance topics.