Groupon Earnings: Decline in Gross Billings Is Slowing but the Focus Is Now on Financial Flexibility

While there were some early indications of a turnaround, such as a significant slowdown in the year-over-year decline of gross billings, Groupon continued to burn cash during the quarter, further increasing the risk of becoming cash-strapped. For this reason, the firm announced it will raise nearly $100 million through the combination of a fully backstopped rights offering and the sale of some of its stake in SumUp. Given the rights offering, management also provided fourth-quarter guidance and some color regarding 2024, most of which was in line with our projections. After considering the dilutive impact of the rights offering, we lowered our fair value estimate to $17.50 from $19.00 per share.