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Technology Stocks : Groupon, Inc.

GRPN 20.47

+7.5%

Nov 5 3:59 PM EST

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To: epicure who wrote (332)	12/7/2012 5:27:34 PM
From: Glenn Petersen	1 Recommendation Read Replies (4) of 480

Google fueled: The Friday Stupid Rumor Of The Week: Google Buying Groupon Eric Savitz Forbes 12/07/2012 @ 5:09PM There’s one of these stupid rumors every single Friday. A rumor so silly that no right-minded person would think it true. Today’s edition: the proposition that Google might make a bid for Groupon. Groupon shares spiked today, fueled in part by speculation that the struggling daily deals company might be a takeover target for Google. Bloomberg stoked the fire, quoting Telsey Advisory Group analyst Tom Fore saying the following: “Where the stock is currently trading, it’s a takeout candidate … If Google was interested at $6 billion, I think it’s a possibility.” This is so wrong-headed I barely know where to start. A $6 billion offer would be 2x the current Groupon market cap. Even if Google DID want to buy Groupon, I doubt they would be willing to pay a 100% premium. Google’s approach to the market is to aggregate information from others. Groupon’s approach to the market is to hire armies of sales people to sign up nail salons to offer cheap pedicures. Synergies? I don’t see many. Google’s mission is to index all the world’s information. Groupon’s mission is to aggregate all the world’s cheap burrito deals. Try to imagine the reaction from the Street were Google to spend $6 billion on a relatively low-rent business like Groupon. This smacks more than anything else of panic-driven short covering. Several stock market news sites reported that Groupon had canceled meetings with investors that were sponsored by Sterne Agee – a rumor Sterne Agee denied was true. Also floating around was the old news that the investment firm Tiger Direct had taken a 9.9% stake in Groupon. But that happened several weeks ago. GRPN today rallied 88 cents, or 23%, to $4.69. The stock has retreated 11 cents in after-hours trading. Barring some odds-defying announcement, expect the retreat to continue Monday morning. forbes.com

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