Groupon’s Stock Price Jump Before Earnings Announcement Being Reviewed

Posted May 18, 2012

Groupon is being investigated about why their stock price jumped hours before a favorable earnings announcement on Monday according to sources with The Wall Street Journal. The investigation is being conducted by Financial Industry Regulatory Authority (Finra). The investigations are in early stages. Groupon’s stock price had jumped 18.5% Monday from the close on Friday. Over 16 million Groupon shares had changed hands on Monday. This is about four times the average daily volume for the past 30 days.

Finra is still deciding whether to refer this trading activity to the SEC. Finra scans about 80% of trading volume and looks for suspicious activity.

Groupon has been notorious for having several financial slip-ups between the time they were planning to go public and now. Before going public in November, Groupon was forced to recalculate their revenue and to stop using their measures for valuation.

After going public at $20, Groupon has dropped 50% because investors have been worried about expenses outweighing their revenue growth.