Groupon Responds to Prescience Point's Call to Disclose Its Stake in SumUp

Rhea-AI Summary

On February 2, 2022, Prescience Point Capital Management updated its price target for Groupon (GRPN) following the company’s disclosure of a 2.4% ownership stake in European payments firm SumUp. This investment, valued at approximately $15 per share, represents over half of Groupon's market capitalization. The report emphasizes that Groupon is undervalued and may experience significant price increases based on upcoming catalysts such as analyst upgrades and reduced short-selling pressure.

Positive

• Groupon's investment in SumUp is estimated to be worth approximately $15 per share, over half of its current market cap.
• Prescience Point identifies multiple positive catalysts ahead, including potential upgrades from analysts and interest from value funds.

Negative

• None.

BATON ROUGE, La., Feb. 2, 2022 /PRNewswire/ -- Prescience Point Capital Management, a research-focused, catalyst-driven investment firm that seeks to earn superior risk-adjusted returns uncorrelated to the broader market, has updated its price target on Groupon, Inc. (NASDAQ: GRPN) ("Groupon" or "the Company") based on the Company's new disclosure of a 2.4% ownership stake in the European payments company SumUp. Prescience Point previously called on Groupon to update the market on its stake following a report by Bloomberg News indicating that SumUp was considering a capital raise of more than 500 million Euros at a valuation of about 20 billion Euros ($22.5 billion).

In its initiation report, Prescience Point stated that it viewed Groupon as a misunderstood company, which had been wrongly left for dead due to an antiquated bear thesis and apathetic sell-side. In particular, Prescience Point stated that market participants had completely overlooked the sizable value of Groupon's investment in SumUp. At the time, Prescience Point estimated that Groupon held a "mid-single digits" ownership stake in SumUp.  

Prescience Point believes that Groupon's public disclosure of its stake in SumUp coupled with the recent news about SumUp's proposed funding round confirms that the investment has tremendous value.  With any lingering conjecture put to rest, investors may now shift their focus towards a series of imminent positive catalysts that will drive Groupon shares significantly higher in short order. These positive catalysts include 1) upgrades and increased price targets from sell side analysts, 2) incremental investments from value and arbitrage funds, 3) significant covering by crowded short sellers who have overplayed their hand, and 4) public discussion regarding a plan for monetization.

Prescience Point estimates that Groupon's SumUp investment alone is worth approximately $15 per share, more than half of its current market capitalization. Factoring in the SumUp investment, the market is valuing Groupon's core business, which is poised for accelerating growth and profitability, at just 2.8x consensus FY 22 adj. EBITDA.

A copy of Prescience Point's new research report on Groupon can be found HERE.

"We believe Groupon's public disclosure of its SumUp stake is significant news that validates SumUp as a true gamechanger for Groupon's equity," said Eiad Asbahi, Founder and Managing Partner of Prescience Point.  "Our research unearthed a previously hidden asset that the market continues to overlook. At this extremely cheap valuation very little has to go right in order for Groupon shares to increase substantially from current price levels."   

DISCLAIMER
This material does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in any state to any person.  In addition, the discussions and opinions in this press release are for general information only and are not intended to provide investment advice.  All statements contained in this press release that are not clearly historical in nature or that necessarily depend on future events are "forward-looking statements," which are not guarantees of future performance or results, and the words "anticipate," "believe," "expect," "potential," "could," "opportunity," "estimate," and similar expressions are generally intended to identify forward-looking statements.  The projected results and statements contained in this press release that are not historical facts are based on current expectations, speak only as of the date of this press release and involve risks that may cause the actual results to be materially different.  Certain information included in this material is based on data obtained from sources considered to be reliable.  No representation is made with respect to the accuracy or completeness of such data, and any analyses provided to assist the recipient of this presentation in evaluating the matters described herein may be based on subjective assessments and assumptions and may use one among alternative methodologies that produce different results.  Accordingly, any analyses should also not be viewed as factual and also should not be relied upon as an accurate prediction of future results.  All figures are unaudited estimates and subject to revision without notice.  Prescience Point disclaims any obligation to update the information herein and reserves the right to change any of its opinions expressed herein at any time as it deems appropriate. 

About Prescience Point Capital Management
Prescience Point Capital Management is a research-focused, catalyst-driven investment firm that seeks to earn superior risk-adjusted returns uncorrelated to the broader market. Unlike traditional investment strategies, we are unconstrained and can opportunistically invest globally, across asset classes, industry verticals and capital structures. Whether investing in misunderstood distressed assets, creating value through shareholder activism, or uncovering fraud, we seek to capitalize on opportunities that others miss or fall outside the rigid mandates of most investment firms.

Our uniqueness resides in our unconventional thinking, deep research, intellectual curiosity and willingness to go against the prevailing wisdom.

The firm was founded by investor Eiad Asbahi in 2009 and is headquartered in Baton Rouge, LA.
For more information please visit www.presciencepoint.com or follow @PresciencePoint.

Prescience Investment Group, LLC is a member of the Financial Industry Regulatory Authority, CRD number 152721.

View original content:https://www.prnewswire.com/news-releases/groupon-responds-to-prescience-points-call-to-disclose-its-stake-in-sumup-301473974.html

SOURCE Prescience Point Capital Management

FAQ

What is Groupon's recent investment in SumUp?

Groupon disclosed a 2.4% ownership stake in SumUp, valued at approximately $15 per share.

How might Groupon's stock price be affected by its investment in SumUp?

Analysts suggest that Groupon's stake in SumUp could drive significant price increases due to undervaluation and upcoming catalysts.

What is the new price target for Groupon set by Prescience Point?

Prescience Point updated its price target for Groupon based on the value of its stake in SumUp, although the exact figure was not disclosed.

What factors are expected to drive Groupon's stock price higher?

Factors include analyst upgrades, investments from funds, and reduced short-seller positions.

Why is Prescience Point optimistic about Groupon's future?

They believe Groupon's SumUp stake is a significant undervalued asset and expect improved market perception.