Groupon Shares Face Mounting Pressure from Short Sellers

Groupon US3994732069

Groupon's stock continues to experience significant selling pressure, with its price approaching lows not seen since March. This downward momentum follows the conclusion of the critical holiday shopping season, a period vital to the company's annual performance.

Market data reveals a notable increase in bearish sentiment toward the deals platform. The short interest in Groupon has broken out of a multi-month trading range, rising from 32.7% to 36%. This surge in pessimistic bets coincides with the end of the revenue period spanning from Cyber Monday through December, which historically contributes approximately 40% of Groupon's annual business. The elevated short percentage suggests certain investors anticipate disappointing consumer spending amid the current macroeconomic climate.

The share price has mirrored this negative outlook. Over a recent five-day trading period ending Thursday, the equity shed roughly 10% of its value, followed by an additional decline of nearly 4% on Friday. This sell-off has pushed the stock toward its March lows, reinforcing the prevailing downward trend.

Institutional Holdings and Low Volatility Contrast with Analyst Outlook

Despite the recent weakness, the consensus price target among analysts remains at $29.80 per share for Groupon. This figure implies a potential upside of over 85% from current levels. It is worth noting, however, that some market researchers currently favor competitors with a higher estimated probability of return.

From an ownership perspective, Groupon exhibits strong institutional backing and low volatility. Institutional investors hold 90.1% of the shares, while company insiders control 35.7%. With a beta of 0.08, the stock is approximately 92% less volatile than the broader S&P 500 index. This indicates a comparatively stable, though currently declining, asset within the wider market environment.