Groupon Inc. (GRPN) shares fell 22 percent, the most in a year, after the online-discounts company forecast first-quarter profit that trailed analysts’ estimates on higher expenses for acquisitions and marketing.
Two purchases last month will hurt profit by $20 million this quarter, Groupon said yesterday after the markets closed. That impact, plus $25 million in additional expenses for marketing and growth initiatives, will lead to adjusted earnings before interest, taxes, depreciation and amortization of $20 million to $40 million, Groupon said. Analysts had estimated $96 million, according to data compiled by Bloomberg.
Chief Executive Officer Eric Lefkofsky has been pursuing acquisitions as he seeks to convert the company from daily e-mail deals to a service offering thousands of discounts. Last month, Groupon completed its purchase of South Korean e-commerce marketplace Ticket Monster Inc. and agreed to acquire fashion site Ideeli for $43 million in cash.
The shares dropped 22 percent to $8.03 at the close in New York, the biggest one-day decline since Feb. 28, 2013, when the company ousted Andrew Mason as CEO after reporting results that disappointed investors. Today’s drop extended the decline for the year so far to 32 percent. The stock had more than doubled in 2013.
The forecast showing the impact of the two purchases put a damper on Groupon’s fourth-quarter results, which exceeded analysts’ estimates with stronger mobile sales.
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