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.
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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
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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.
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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.
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