The stock price of Groupon Inc (NASDAQ:GRPN) surged more than 40% to $4.06 per share around 1:21 in the afternoon in New York today. The daily deals company’s stock climbed for the second straight trading day.
GRPN shares gained around 70% in two days of trading (combined with its 29% gain on Friday). Today’s increase was primarily driven by the investment of Alibaba Group Holding Ltd (NYSE:BABA) in the daily deals company.
Alibaba acquired 5.6% stake in Groupon
In a regulatory filing with the Securities and Exchange Commission (SEC) on Friday, Alibaba disclosed that it acquired 32,972,000 shares or 5.6% of Groupon. The Chinese e-commerce giant became the fourth-largest shareholder of the daily deals company.
Groupon spokesman Bill Roberts commented, “Alibaba has a reputation as a long-term holder, and we’re pleased that they take the same view of Groupon’s opportunity and execution as we do.” According to him, they weren’t aware of Alibaba’s investment until the filing.
Since its initial public offering in 2011, Groupon lost around 80% of its market value. CEO Rich Williams increased the company’s marketing budget to revive its business. The daily deals company was once an internet darling. Williams replaced Eric Lefkofsky as CEO in November.
The management of the daily deals company has been reducing its business operations overseas. The management already closed its operation in 17 countries. The company is still operating in 28 countries.
Groupon fourth-quarter results
Alibaba revealed its stake after Groupon reported its fourth-quarter financial results that exceeded the expectations of Wall Street analysts.
The daily deals company posted non-GAAP earnings of $0.04 per share. Analysts expected the company’s quarterly financial performance to be break-even. Its revenue increased from $883.2 million to $917.2 million for the quarter. The company’s gross billing declined 1% from $1.72 billion to $1.71 billion.
Williams said Groupon entered 2016 with a continue focus on streamlining its global operations, reducing its reliance on low margin products and rekindling customer acquisition efforts to position the company towards an accelerated growth.
In a recent interview with Bloomberg TV, Williams said Groupon’s stock was undervalued.
 surged more than 40% to $4.06 per share around 1:21 in the afternoon in New York today. The daily deals company’s stock climbed for the second straight trading day.){kind=link}