Groupon Inc. Loses a Quarter of Its Market Value

Groupon Inc has recently admitted to losing a quarter of its market value on Wednesday after just revealing that they began to take smaller cuts of their revenue on daily deals during the holidays.

They did so to sacrifice revenue and profits in order to attract and keep merchants.

The company has actually lost more than 75% of its value since it started at $20 in November of 2011. As Tom White, an analyst at Macquarie said, “This raises questions about how these guys are going to be able to scale the business. The forecast is underwhelming.”

Groupon has kept almost 40% of the money that they generated by daily deals. That then declined to 35% in the 4th quarter. The company is hoping that profitability will improve. As Child said, “We are focused on driving growth. We will make the investments we feel we need to optimize for growth and merchant profitability.”