Groupon Doesn't Look Like a Deal to Fund Managers
They're not exactly treating it like Google.
Five months have passed since Groupon's (GRPN) initial public offering. It's clearly been a bumpy ride lately: After an initial surge and a succession of dips and spikes, the stock has declined steadily since early February. Amid concerns about the company's accounting, downward revisions of its revenue, and slowing growth, Groupon's price has dropped to under $15 per share from more than $24. Morningstar stock analysts have stated the company's been overvalued since the date of its IPO.
Mutual funds haven't shown a tremendous amount of enthusiasm about Groupon from the outset compared with other notable IPOs in the past. True, access to the shares has been limited as the company has sold just a small percentage of itself through the stock. But even the smaller funds haven't exactly been loading up on Groupon. Thus far, no nonleveraged equity fund has invested more than 2.5% of its assets in the stock. The biggest holders so far, by percentage of assets, have been rather sizable growth funds run by successful veteran skipper Dennis Lynch: The $7.3 billion Morgan Stanley Institutional Mid Cap Growth (MPEGX) had 2.2% of its assets in Groupon at the end of 2011, and three other Lynch charges-- Morgan Stanley Focus Growth (AMOAX), Morgan Stanley Multi Cap Growth (CPOAX), and Transamerica Capital Growth (IALAX)--had 1.4%-2.5% stakes.
Greg Carlson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.