Shares of daily deals site Groupon Inc. (NASDAQ: GRPN) tumbled in trading today as restriction on insider selling expired.
GRPN shares fell to an all-time low of $9.53. At last check, the stock was trading 8.36% lower at $9.75 on above average volume of 20.81 million. The stock fell more than 18% in the last three trading sessions. Earlier today, over 600 million GRPN shares were released from restrictions on insider selling. Herman Leung, analyst at Susquehanna, told MarketWatch that with that many shares coming out to the market, it could potentially pressure shares.
The sharp decline in GRPN shares comes after Facebook Inc.’s (NASDAQ: FB) disappointing trading debut. The social networking giant had completed its much-awaited IPO two weeks ago. But, shares have since then tumbled more than 30% from the IPO price of $38, raising some serious questions about FB’s valuation.
Unlike Facebook, Groupon’s trading debut was a success as the company’s shares soared following the IPO. However, the stock ran out of steam soon, and since has performed poorly. Since its IPO in November, GRPN shares have fallen more than 63%.
GRPN shares have also come under pressure as investors question the company’s business model. According to Leung, investors are still skeptical about GRPN’s business model. Leung believes that this skepticism extends to other social networking stocks as well, including Facebook.
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