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Hedge Fund Bets Big on Groupon

And GRPN shares charge ahead on the news


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.

Article printed from InvestorPlace Media,

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