Prescience Point Capital Management Raises Price Target on Groupon, Inc., to $88.17 Per Share

Rhea-AI Summary

On January 31, 2022, Prescience Point Capital Management updated its price target for Groupon, Inc. (GRPN) to $88.17 per share, emphasizing the overlooked value of Groupon's stake in European payments company SumUp. The firm estimates this stake could surpass $1 billion, significantly more than Groupon's current market cap, indicating substantial hidden value. Positive catalysts are expected from Groupon's potential disclosures regarding SumUp, which could drive share prices higher, despite a recent 20% increase since SumUp's funding news.

Positive

• Prescience Point estimates Groupon's stake in SumUp could exceed $1 billion, over $200 million higher than Groupon's market cap.
• Recent reports suggest SumUp is seeking to raise over 500 million Euros at a valuation of approximately $22.5 billion, confirming the value of Groupon's investment.
• Potential catalysts include public confirmation of ownership in SumUp, analyst upgrades, and increased investor interest.

Negative

• Despite a 20% increase in Groupon's share price, it is still trading below its estimated fair value of nearly $33 per share.

BATON ROUGE, La., Jan. 31, 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, announced today that it has updated its price target on Groupon, Inc. (Nasdaq: GRPN) ("Groupon" or "the Company") based on new information that indicates the value of the Company's stake in the European payments company SumUp is worth more than Groupon's entire market capitalization.

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.

On Jan. 26, Bloomberg News published a report 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) according to "people familiar with the matter."  

In its initiation report, Prescience Point estimated that Groupon owned ~5% of SumUp. Moreover, Prescience Point was recently informed by a large Groupon shareholder that former Groupon CEO, Aaron Cooper, confirmed to them that Groupon's SumUp ownership stake was in the "mid-single digits." Accordingly, Prescience Point believes Groupon's SumUp stake alone could be worth >$1 billion, ~$200 million more than Groupon's current market capitalization.

Prescience Point believes the recent news of SumUp's proposed funding round, which confirms the significant value of Groupon's SumUp stake, will be the spark that sets off a series of positive catalysts that will drive Groupon shares significantly higher in short order. These positive catalysts include 1) public confirmation by Groupon of its ownership percentage in SumUp, 2) increased price targets from sell side analysts, 3) incremental investments from value and arbitrage funds 4) and covering by crowded short sellers.

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

Prescience Point urges Groupon to publicly disclose its ownership percentage in SumUp and update the market on a path toward stake monetization and plans for the proceeds (e.g., special dividend, share buyback, etc.).

"Although Groupon's share price increased by more than 20% since the news of SumUp seeking to raise capital at a €20 billion valuation, its shares are still trading at just a fraction of their fair value," said Eiad Asbahi, Founder and Managing Partner of Prescience Point. "We believe that Groupon's SumUp investment alone is worth almost $33 per share. This means that investors who purchase Groupon shares today, which are currently trading at around $27 per share, are buying its SumUp investment at a discount, and on top of this, are receiving Groupon's core business, which is poised for accelerating growth and profitability, essentially for free."   

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.

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SOURCE Prescience Point Capital Management

FAQ

What is Groupon's current market capitalization?

Groupon's current market capitalization is estimated to be around $800 million.

How much is Groupon's stake in SumUp worth?

Prescience Point estimates Groupon's stake in SumUp could be worth more than $1 billion.

What price target has Prescience Point set for Groupon?

Prescience Point has raised its price target on Groupon to $88.17 per share.

What recent developments have influenced Groupon's stock price?

The news of SumUp seeking to raise capital significantly boosted Groupon's stock price by over 20%.