Today’s collapse in Zynga Inc. (NASDAQ: ZNGA) shares was predictable given last night’s downward revision for quarterly earnings expectations. What was not predictable was today’s rise in shares of Groupon Inc. (NASDAQ: GRPN).
Groupon had no news today, so it must be that investors are happy to find a social media stock today that is neither Zynga nor Facebook Inc. (NASDAQ: FB). Groupon’s shares got off to a slow start today, down about 0.6% at the open, but by mid-afternoon the shares were up over 10%. Groupon started the day down about 18%, fell further to below 20%, and now trades down around 16%. Facebook, too, has been lower all day but not by as much as Zynga.
Nearly 18% of Groupon’s stock is short, and today’s sell-off of Zynga’s shares is enough to get the short sellers to happily cover. Groupon’s volume was about 30% higher than usual too. Groupon is scheduled to report earnings next Friday, and the short sellers can’t wait.
Groupon’s shares are up more than 10% about 45 minutes before closing today, at $5.29 in a 52-week range of $4.00 to $31.14.
Paul Ausick
Top Gaining Stocks
Top Losing Stocks