Groupon (NASDAQ:GRPN) said in its second round of layoffs.
Shares fell almost 10% on the day of the announcement but recovered 2% overnight. Groupon was expected to open on Jan. 31 at $8.50 per share, a market capitalization of about $260 million.
Groupon came public in November 2011 in what was then one of , now called Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL). At one point GRPN stock traded for over $400 per share.
Fall of an Internet Icon
The latest layoffs will bring Groupon’s employee base to about 2,000. Combined with a previous layoff last summer, Groupon will have let go of about one-third of its staff.
The idea behind Groupon was that consumers would combine their buying power online to get better pricing. Small companies would make offers conditional on the purchases. The idea seemed powerful at the time but has since become something of It has been bypassed in Rakuten (OTCMKTS:RKUNY) and Paypal’s (NASDAQ:PYPL)
, neither of which require group commitments.
Groupon is still active, recently offering 50% off on memberships in Walmart’s (NYSE:WMT) . But revenue has been falling steadily, from $2.2 billion in 2019 to an estimated The company did manage a profit in 2021 when it traded for as much as $50 per share.
When the company , management said the goal was to become “cash flow positive” by the end of 2022. Statista shows 22 million people buying through Groupon in the first quarter of 2022, down from nearly .
Groupon Layoffs: What Happens Next?
Companies that fail to adapt can fall quickly, especially on the Internet. Groupon’s headquarters are in the former offices of , a mail-order company that failed to adapt to change in the 20th century.
On the date of publication, Dana Blankenhorn held a LONG position in GOOGL stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
