Discount website groupon continues to lose millions

discount website groupon continues to lose millions

Even in the final quarter, for which analysts had expected a profit, groupon lost 43 million dollars. It was the first quarterly report since groupon went public. The stock temporarily lost 10.50 percent to 22 dollars in early new york trading. In the meantime, the share price had already fallen below the issue price of 20 dollars. Groupon is the market leader in the discount business, but is beset by rivals like livingsocial.

At the same time, groupon continues to grow rapidly. Quarterly sales jump from 172.2 to 506.2 million dollars within one year. The company also attributes the high loss to rapid expansion. Due to the expansion of the international business and the establishment of a new administrative location in switzerland, the tax payment of 34.8 million dollars was significantly higher than expected, explained chief financial officer jason child.

Co-founder and chief executive andrew mason said he was pleased with the company’s performance. Groupon has "saved billions of dollars" for its now more than 33 million users and boosted the businesses of 250,000 local companies in 47 countries. The company, based in chicago, is also active in germany. Groupon recently won telekom as a partner for mobile offers.

Groupon went to the stock exchange at the beginning of november with rough expectations. At groupon, companies can offer discount coupons for their business. The deal will go through if a certain number of interested parties make a move. The website itself keeps a commission, typically around half the value of the voucher. But as it turns out, the revenues are still not enough to cover the costs.

Compared to the previous year, groupon was able to reduce its annual loss somewhat. In 2010, the young company had still lost 456 million dollars. However, the number of users has not risen as rapidly as in the early days. Some critics even doubt that the business model can work at all.

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