Groupon, known for its coupon services, is catching the attention of an activist investor who believes the company's stock is poised for a comeback. Windward Management recently disclosed an 8.9% stake in Groupon (ticker: GRPN), causing the shares to rise by 4.6%. This boost comes as a relief to long-term investors, as Groupon's stock has experienced a steep decline of 99% since its initial public offering 12 years ago, despite a 34% increase this year, currently trading at around $11.65 per share.
The ongoing pandemic and post-pandemic economic challenges have further hindered Groupon's stock performance. With lockdown measures in place, people refrained from going out, resulting in reduced demand for Groupon's services. Additionally, the surge in post-pandemic consumer activities meant that businesses did not heavily rely on deals to attract customers. However, Windward Management believes that Groupon can regain its momentum, considering the persistent inflation and the inevitable return of customers in search of discounts.
Groupon has chosen not to comment on Windward's stake at this time. However, Windward finds encouragement in Groupon's recent leadership change. Earlier this year, Dusan Senkypl and Jiri Ponrt from Czech-based Pale Fire Capital assumed interim CEO and chief financial officer positions, respectively. Pale Fire Capital currently holds a 22% stake in Groupon and has started revamping the deals offered in each region while also restructuring compensation for the sales force.
With favorable economic conditions and new leadership as catalysts, Windward Management envisions Groupon's stock reaching $55 within the next 12 months.
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