Coupons.com Drops Below IPO Price After Second-Quarter Loss

Aug 07, 2014 4:44 pm ET

(Updates starting in first paragraph to add declines earlier this week in Groupon and RetailMeNot.)

Aug. 7 (Bloomberg) -- Coupons.com Inc. became the third online coupon seller this week to tumble more than 10 percent the day after reporting earnings.

Coupons.com, whose shares almost doubled after being taken public by Goldman Sachs Group Inc. and others in March, plunged below its offering price after reporting a wider loss than analysts estimated. Shares of the Mountain View, California- based company fell 24 percent to $14.91 as of 4 p.m. in New York, the biggest decline on record.

The loss follows declines of almost 13 percent in Groupon Inc. yesterday and 29 percent in RetailMeNot Inc. the day before, as both companies reported second-quarter revenue below analysts’ projections. The companies have lost nearly $1.3 billion in market value this week as investors reassessed the growth prospects for web-based discount providers, said Kimberly Opiatowski, an analyst at the Vertical Group.

“We’re at the point of coupon exhaustion,” New York-based Opiatowski said in a phone interview. “These companies have had such explosive growth rates. Across the market there’s some risk-off going on, and investors are taking a closer look here.”

The Nasdaq 100 Index slipped 0.4 percent today, bringing its three-day decline to 1.3 percent. The gauge has retreated almost 3 percent since July 30.

Paul Sloan, vice president of communications for Coupons.com, declined to comment on the stock trading.

Coupons.com, which took coupon clipping from newspapers to the Web in 1998, reported a second-quarter loss of 9 cents a share yesterday, compared with the average analyst estimate for a 5-cent loss from a Bloomberg survey.

Shares of the company have fallen 51 percent since climbing to a record $30.17 in June. They surged 88 percent after 12.08 million were sold in an initial offering for $16 in March.

Groupon, RetailMeNot

Coupons.com, which generates revenue when consumers download a coupon for redemption, provides discounts for 700 packaged goods producers like Kellogg’s and Johnson and Johnson. Customers using Groupon pay for discounts on local goods, events and services. RetailMeNot provides online deals that enable users to purchase discounted goods.

Groupon fell 12.7 percent yesterday after the company forecast third-quarter earnings of as much as 2 cents a share, excluding some items, compared with the average analyst estimate of 3 cents a share.

RetailMeNot declined 28 percent on Aug. 5 to below its IPO price after saying earnings decreased 16 percent to $4.3 million, or 8 cents a share, missing analyst forecasts for 17 cents.

“There’s so much competition in the space that even though these companies aren’t meant to compete against each other, this landscape is changing and they’re bumping into each other,” Opiatowski said.