Groupon Inc (NASDAQ:GRPN) rallying on a post-Mason high

Posted by Ryan Mandell June 20, 2013 0 Comment 1401 views

Just as it seemed like Groupon Inc (NASDAQ:GRPN) was about to drown, it resurfaced and leaped out of the turbulent waters that threatened to wolf it down into its depths.  The company showed CEO Andrew Mason the door and began mending itself. In its last quarter, the daily-deal site boasts 200M subscribers and its stock has finally been rallying. Late last year, things didn’t really look good at all. GRPN’s shares price dropped to below $3/share.

Its 8% increase in the Q1 is being partly attributed to Mason’s departure. He had announced very recently, that he will be a partnering Y Incubator, a start-up, part-time. Mason is Groupon’s founder but he was also the one who bore the blame for its downfall. As if to prove it, in 2012, CNBC ended-up naming him “Worst CEO of the Year”.

The backdrop

It was just in March that the company fired Andrew Mason, its charismatic CEO, post a tumultuous tenure that was riddled by accounting gaffes, immature stunts as well as a massive 77% drop in GRPN’s share price. Though his last wave to the company was an expected one, the last nail in the coffin was probably Groupon’s announcement of an $81M net loss in the earlier quarter. This sent the company’s stock hurtling down 24% in one  single day and also resulted in sending Mason packing.

When and how does a stock rally?

When the price of bonds, stocks and indexes maintain a high for a certain period of time they are said to be “rallying”. This sort of a price movement takes place either in a bear or bull market. However, a rally generally follows a period of plateaued or declining prices. A rally is generally caused by a huge amount of cash entering the market, which bids-up the prices. The duration or magnitude of any rally is dependent on the depth of buyers in addition to the amount of selling pressure that they face. If, for instance, there is a big pool of buyers but very few investors who are willing to sell, in most probability there will be a large rally. Whats left to be seen is whether GRPN’s rally lasts or not.

About Ryan Mandell

Ryan Mandell is our senior staff writer covering the White House for Political Report, Ryan also coordinates with the main newsroom news items and contributing write-ups on cultural, social and political activities. Ryan holds an undergraduate degree in journalism, a Doctorate in international relations and a Master Degree in mass communications with an emphasis in print journalism. Ryan also covered the International Society of Social Defense congress in Spain in 2007 and taken part in the Global Forum on economic policies

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