Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Groupon (GRPN) has been in a death spiral since revising its last quarterly earnings report March 30th – which once again called into question its accounting. There have always been questions about the viability of the business model long term, as many clients don’t find their deals bring back repeat customers, but once you have the stench of accounting issues, it is very hard to shake off. The stock also shows – while the exception rather than the rule in the first 3 months of 2012 – often the first loss is the best loss.
If one had been unfortunate enough to be in the stock when the news came out (which you can’t do a darn thing about) taking that first loss in the $15s will sting… but be much better than taking it in the $14s, $13s, $12s, or $11s. This name is now down 13 of the past 14 sessions. At some point their will be value here, and at least a dead cat bounce but catching knives is only for the most nimble. Ugly stuff.
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Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
