Groupon shares up 8.5 percent after wunderkind’s investment
BY SANDRA GUY Business Reporterfirstname.lastname@example.org November 19, 2012 5:36PM
Groupon headquarters in Chicago.
Updated: November 20, 2012 8:04PM
Groupon stock jumped 8.5 percent Tuesday after news that Tiger Global, a successful New York hedge fund, drastically increased its stake in the Chicago daily deals site to 9.9 percent Monday. The stock had shot up as high as 13.4 percent earlier Tuesday.
Hotshot investor Chase Coleman — listed among Fortune magazine’s 2012 top business people under 40 —runs Tiger Global.
The late afternoon Monday news had boosted Groupon’s stock price nearly 6 percent in after-hours trading.
The stock price on Tuesday closed at $3.37 per share, still down 83 percent from its initial public offering price on Nov. 4, 2011.
Coleman’s fund had invested $6 million in Groupon in the third quarter, according to filings posted in November.
The new investment of 65 million shares is worth $201.8 million, based on Groupon’s closing stock price of $3.11 a share, according to the regulatory filing made public Monday.
A Tiger Global employee who answered the phone had no comment, but news reports say the $8 billion hedge fund, which has grown rapidly, invested $400 million in Yahoo in the third quarter and bet big early on in Facebook.
Coleman, 37, is among the nation’s billionaires, with a net worth of $1.5 billion, according to Forbes.
The investment marks a third win for the Chicago-based Groupon recently: The daily deals site attracted new investments in the third quarter from renowned progressive investor George Soros, whose fund acquired 2.5 million shares, and from multi-billion dollar hedge fund Tudor Investment Corp., which snapped up 150,000 shares, according to regulatory filings.
Other investors are fleeing, including Russian social networking group Mail.Ru, which has also slashed its holdings in Facebook, according to regulatory filings.
Groupon is evolving into new businesses as regulators scrutinize its financial reports and as analysts question the company’s ability to keep growing in a maturing, competitive industry with high marketing costs. The company sells discounted products through its Groupon Goods division and offers its merchant partners software platforms to manage their operations and offer customers incentives to return to the stores, among other features.