Groupon’s stock plummeted Wednesday after it posted worse-than-expected financial results and said it’s backing away from plans to become an online retailer akin to Amazon.
Shares of the company — which got its start selling coupons for local restaurants and spas and has since moved into selling products — plummeted nearly 44 percent to an all-time low of $1.71 in early trading Wednesday.
The company late Tuesday posted adjusted net income of $44.5 million, or 7 cents a share, for the three months ending Dec. 31 — roughly half Wall Street’s average expectations of $96.2 million, or 15 cents a share, according to Bloomberg data.
Following its dismal results, Groupon said it will ditch its so-called Goods marketplace for selling purses and phone chargers — a defeat for the company that had once aspired to become a large online retailer of discounted goods.
“Our failure to meet the expectations we set will understandably frustrate our shareholders, as it has us,” Groupon CEO Rich Williams wrote in a Tuesday letter to stockholders. “This performance shortfall, coupled with the significant headwinds we continue to face, call for profound change.”
Groupon plans to re-launch its brand with a new marketing strategy highlighting its discounted experience offerings, which it views as a major engine for potential growth, Williams said.
The company aims to capitalize on its brand recognition to be “top of mind when our customers are looking for the best things to do around them, when they need something to do with their kids on the weekend or for when they’re planning date night,” Williams wrote.
“Goods has outlived its role as a business driver and has become a significant drag on our business,” Williams added.
Groupon’s shares had risen 26 percent since the start of the year to close at $3.05 Tuesday before the company’s disappointing report. It had pared Wednesday’s losses to 40.8 percent as of 12:32 p.m.
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