Benchmark: Andrew Mason Agrees to Hold Shares After IPO Lockup Expiration
According to The Benchmark Company, Groupon (NASDAQ: GRPN) is on the brink of a powerful cash flow opportunity after visiting the company's Chicago sales office.
The three takeaways from the visit were as follows, "1) The IPO lock-up, which has been a major overhang on the stock, expired last Friday; 2) recent enhancements to marketing efficiency should be sustained; and 3) the market opportunity remains enormous as Groupon is leading the online charge into local commerce."
Groupon is apparently transitioning from customer acquisition marketing to customer activation, resulting in decreased marketing expenditures from $230M in 1Q11 to $116M in 1Q12. Attempts now turn to converting more subscribers into customers and focusing on on more targeting marketing around company offers.
Benchmark goes on to say, "Groupon is building a global platform for local commerce online. The local market is largely untapped with limited technological support currently. Groupon is coupling acquired technology with existing merchant relationships to leverage its brand position. With the vast majority of commerce completed locally, Groupon's global opportunity is massive. We believe scale and brand recognition are keys to long-term success on the Internet and view Groupon's first mover advantage as meaningful."
Investors should remain confident in Groupon, as the company has become more creative in offerings for deals to secure coupon use. CEO Andrew Mason and other co-founders have also committed to holding their 33% shares now that the IPO lockup has expired, freeing up 93% of the stock.
Benchmark maintains its Buy rating and $20 price target on Groupon, which is currently trading up $0.04 from yesterday's $8.95 closing price.
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