|GRPN has had a nice move since bottoming out in June.|
Deal of the Day: Will Groupon Get Acquired?
An analyst thinks there’s “reasonable probability” of the company getting bought by IAC.
By Emily Bary
Sept. 21, 2017 7:42 p.m. ET
Coupon site Groupon could be IAC’s next project, an analyst argues. Illustration: Getty Images/iStockphoto
A little Groupon enthusiasm goes a long way on Wall Street.
Shares of the online-coupon platform rose more than 3% Thursday following an upbeat assessment from Piper Jaffray analyst Samuel Kemp, who applauded the company’s cost-cutting initiatives and suggested that Groupon could be a takeover target.
Though Groupon feels like somewhat of a forgotten Internet company, it said last month that it had almost 32 million active members in North America and it’s looking for new ways to generate business. Earlier this month, it launched Groupon+, which gives folks cash-back deals at certain restaurants without making them print out coupons first.
In a press release announcing the service, Groupon went so far as to say that Groupon+ could be an appealing option for daters who don’t want to pay full price for dinner but don’t want to look cheap either.
Kemp thinks that if Wall Street doesn’t come around to Groupon, perhaps another company will see its potential. IAC CEO Joey Levin just joined Groupon’s board, and his company owns a collection of brands. “We believe there’s a reasonable probability that Groupon could be acquired by IAC, especially if the public markets do not better reflect the fair value of Groupon,” Kemp wrote late Wednesday.
Groupon’s “marketplace models are well aligned with IAC’s past project companies,” he added. And “IAC’s portfolio... increasingly begs for another significant project” now that the company has spun off Match Group and is doing the same with its home-services business.
Big Picture: An analyst likes the moves that Groupon is making. He also likes the company’s chances of getting acquired.