Shares of Groupon (NASDAQ:GRPN) are on fire Tuesday after hedge fund Tiger Global Management announced it purchased a 9.9% stake in the beleaguered daily deals site.
Tiger Global, which has $8 billion in assets, is one of the world’s top investors. The fund has been aggressive with other tech giants, including Yahoo! (NASDAQ:YHOO) and Facebook (NASDAQ:FB), but the move to buy big into GRPN is gutsy, even for Tiger.
As seen in the company’s latest quarterly report, Groupon’s core business appears to be in trouble; to deal with this, Groupon has begun selling physical goods — and while that has added another revenue stream, it also comes with thinner margins.
Tiger Management provided no reasons for the investment, but individual investors still should take the move as a serious reason for optimism. Tiger Management has a solid track record, including an impressive 22.5% return on the fund as of the end of October.
Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook.“ Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.
A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.
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