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Amazon's Living Social Stake Sees Value Decline

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Amazon's Living Social Stake Sees Value Decline

The value of Amazon's (NYSE: NASDAQ) stake in LivingSocial fell in the second-quarter, even though the daily-deals site reported 26% sequential revenue growth.

The rising sales may be helping to validate demand for the online coupon business category.

Daily deals rival Groupon's (NASDAQ: GRPN) shares traded up 14% on Friday, recovering from its 8% slide on Thursday. Poor results for social-related games-maker Zynga (NASDAQ: ZNGA) and a negative Groupon reserach note from analyst Ken Sena at Evercore may have catalyzed the move lower.

Amazon's 29% stake in LivingSocial is now worth $271 million, down from $298 million in the first-quarter, according to an SEC filing.

LivingSocial's total value is now $934.5 million, down from more than $1 billion three months earlier.

Revenue rose to $138 million. By comparison, it reported sales of $245 million for all of 2011, and a net loss of $558 million. However, the company is struggling with negative margins. LivingSocial reported a second-quarter loss of $93 million. It had earned $156 million in the prior quarter.

LivingSocial cut more than a dozen employees this week, including three executives, in an effort to streamline and better compete with Groupon.

The company said it had no immediate plans to file an IPO, in the wake of poor public debuts for Facebook (NYSE: FB) and Groupon.

Facebook shares are down more than 35% from its IPO price in May; Groupon shares are down more than 60% since its debut late last year.

 

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