The stock price of Groupon Inc (NASDAQ:GRPN) has dropped consecutively for three days this past week. Groupon opened at $20 per share and it closed yesterday at $16.96. So why is Groupon’s stock dropping?
Investors are worried that Groupon’s profit margins are being squeezed due to increases in marketing costs. LivingSocial.com is also growing at a rapid pace with Amazon.com’s full backing. The European credit crisis is worsening, which would also effect Groupon’s international initiatives.
Groupon is not the only Internet company that has taken a beating on the public markets. Demand Media went public at $17 and is now trading at $6.85. Pandora went public at $16 and is now trading at $10.51. Renren went public at $14 and is now trading at $3.75. Yandex went public at $25 and is now trading at $20.05.
[New York Times]