GO
Loading...

Analyst: Wait for a Better Groupon Deal

Wait for a better deal on Groupon, one analyst said on the first day underwriters were able to rate stock of the newly public daily-deals company.

Citigroup analyst Mark Mahaney praised Groupon’s success to date, but said Wednesday on “Fast Money” that the companies new initiatives were still untested.

Underwriters were mixed on Groupon, sending its shares plunging more than 5 percent midday to $22.08. A day earlier, Groupon rallied in anticipation of good news.

The company, which held its IPO in early November, recently launched Groupon Now, an inventory-management system, and Groupon Rewards, a customer-retention program.

The move sought to expand the company’s offerings into such areas as goods, travel and event ticketing.

“That’s a highly, highly competitive arena. You’re essentially, then, taking on Amazon, eBay, other companies like that,” Mahaney said. “We don’t know whether this management team in this company can stretch to do that.”

Mahaney added that there was time left to have leadership tested in the six-month lockup period during which employees are prohibited from selling stock.

Mahaney shared his assessments of a couple other online favorites:

Amazon.com : The stock slipped on a few concerns. “How low could margins go? Are we going to see negative margins in the first half of 2012?” Mahaney said. Talk of trouble with the company’s Kindle Fire also weighed on the stock. “Amazon is becoming a product-cycle company in part, so the stock will go up or down on perceptions of those products,”

Google : Mahaney said he liked the Internet giant’s valuation, trading at 13 times earnings and called it a great derivative play mobile Internet and TV ad budgets. “It’s our top pick in the Internet space,” he said.

Related Stories

______________________________________________________

Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On Dec. 14, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Scaramucci is long AAPL; Scaramucci is long C; Scaramucci is long INTC; Scaramucci is long EBAY; P. Najarian is long AAPL; P. Najarian is long MSFT; P. Najarian is long INTC; P. Najarian is long YHOO; P. Najarian is long MOS; P. Najarian has long calls BAC; P. Najarian has long calls JPM; P. Najarian has long calls WFC; P. Najarian has long calls BRCM; P. Najarian has long calls JOY; P. Najarian has long calls ETFC; Cortes is long TSN; Cortes is long SVU; Cortes is short EUR; Cortes is short AUD; Cortes is short GBP; Cortes is short Crude; Cortes is short AAPL; Cortes is short DB; J. Najarian sold puts GLD; J. Najarian sold puts AAPL; J. Najarian is long CBOE; J. Najarian is long CME; J. Najarian is long CIGX; J. Najarian has long call spreads JPM; J. Najarian has long call spreads GS; J. Najarian has long call spreads V; J. Najarian has long call spreads PNC; J. Najarian has long call spreads DMND

For Anthony Scaramucci
SkyBridge Capital is a fund of funds manager; funds in which SkyBridge funds invest may or may not own INTC.

SkyBridge Capital is a fund of funds manager; funds in which SkyBridge funds invest may or may not own EBAY.

For Mark Astrachan
Stifel, Nicolaus & Company, Inc. expects to receive or intends to seek compensation for investment banking services from Green Mountain Coffee Roasters Inc. in the next 3 months.

Stifel, Nicolaus & Company, Inc. makes a market in the securities of Green Mountain Coffee Roasters Inc..

Stifel, Nicolaus & Company, Inc.'s research analysts receive compensation that is based upon (among other factors)

Stifel Nicolaus' overall investment banking revenues.

For Chris Caso
SFG is a market maker in the securities of Broadcom Corp. (BRCM).

For Mark Mahaney
Within the past 12 months, Citigroup Global Markets Inc. or its affiliates has acted as manager or co-manager of an offering of securities of Groupon, Inc.

Citigroup Global Markets Inc. or its affiliates has received compensation for investment banking services provided within the past 12 months from Groupon, Inc.

Citigroup Global Markets Inc. or an affiliate received compensation for products and services other than investment banking services from Groupon, Inc. in the past 12 months

Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s): Groupon, Inc.

Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment banking, non-securities-related: Groupon, Inc.

Analysts' compensation is determined based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates ("the Firm"). Like all Firm employees, analysts receive compensation that is impacted by overall firm profitability which includes investment banking revenues

The Firm is a market maker in the publicly traded equity securities of Groupon, Inc.

For Jens Nordvig
No disclosures

For Rich Ilczyszyn
Ilczyszyn is short gold

For Jeff Bencik
No disclosures

CNBC.com with wires.

Contact Halftime Report

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET