Back in July, Randall detailed his accounting concerns about the online deals marketer and said its shares should trade at $5, a price-to-revenue discount to more established marketing peers such as Nielsen (NLSN) and Arbitron (ARB).
Even though the stock has now dropped to his fair price on a recent string of poor news, Randall says that he still will not but it.
“Groupon is comedy gold; it's the gift that keeps on giving,” he said. “Every time you turn around, there's another fascinating train wreck.”
Concerns are now being raised about Groupon’s business model, whether the company is delivering value for it small-business customers, and prompting news headlines including, “Ding Dong, Daily Deals Are Dead.”
The company's biggest concern of all, Randall says, is its first-ever quarter-to-quarter decline in gross billings – a measure of how much money Groupon is collecting from its customers, and a potential harbinger of future revenue.
“It means the core Groupon business is now shrinking,” he says. “The company would be approaching a fair price if it were stabilizing, but that is not the case. So while it ought to trade at two times revenue, or about $5 a share, at this point it deserves to trade at a discount.”
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