Groupon Shares up on Potential Earnings Surprise

Groupon

is scheduled to release its second quarter earnings results after the bell today. The stock since its IPO has been lambasted by traders, losing over 60 percent of its value. But signs of stabilization and a short squeeze Friday propelled shares up more than10 percent. Over the past month

has held steady, of the thirteen analysts covering Groupon, only one had a downward revision. Analysts are pegging two cents per share loss for the same period last year. Last quarter's report exceeded expectations as revenue was up 89 percent to $559.3 compared to the same period of 2011. The e-commerce marketer back in

its income from operations to be between $25 and $45 million compared to a loss of $10.1 million in the second quarter last year. The stock has been under pressure since it dubious debut last November. Coming into question besides its inflated valuation are the company's flawed business model and suspect accounting transparency. Regulators had previously questioned Groupon's

. The company stopped reporting a controversial financial metric called Adjusted Consolidated Segment Operating Income last year. Groupon has been

since it increased the size of its IPO to raise $700 million and a market value $13 billion. At the time it was the second largest Internet IPO since Google

raised $1.7 billion in 2004. When the smoked cleared investors, insiders and analysts questioned Groupon's ability to sustain growth. In the long run competition from Internet giants Google and Amazon

may slowly but surely erode Groupon's customer base. Faced with companies that have deep pockets and a vast reach, Groupon may find it increasingly difficult to maintain its profit margins enough to keep investors content. But to company's credit the growth its Groupon Goods business have estimates at $50 million per quarter in less than a year since it inception. "I can see it becoming a really good, big business for them," Sameet Sinha, an analyst at B. Riley & Company told Reuters. But Sinha still sees controversy ahead with Groupon's accounting issues. Groupon shares continue to rise up another 3.5 percent on top Friday's double digit percentage gain. The stock has been beaten down especially over the past three months losing 40 percent of its value. With plenty of bad news already baked into the stock the recent bounce could have further legs after today's report. It would be prudent to not trade the initial report but rather listen to the conference call scheduled for 5pm EST.