Groupon shares down 23% to all-time low

Groupon REALLY missed the mark, and now shares are at an all-time low

After coming in way below estimates, Groupon shares were down 23.5% Tuesday morning to $5.77 from Monday's close at $7.55.

The company released its second quarter 2012 results Monday evening, and they weren't good.  The company missed revenue estimates by a pretty wide margin, with $568.3 million in revenue when the Street consensus was anticipating $578 million.  Citi’s Mark Mahaney even predicted as much as $583 million in net revenue. 

Groupon stock dropped 20% in after-hours trading to $6.06, from $7.55 at the close.

Anticipating the backlash, Groupon explained that year-over-year changes in foreign exchange rates had a negative impact to the tune of $32.4 million on the company’s revenue last quarter, which was 45% higher than the same quarter last year ($392.6 million), but would have been 53% higher.

Gross billings—the total amount that Groupon collects from users, which includes the merchant’s cut—also came up short at $1.29 billion, while Citi was anticipating $1.45 billion.  While that’s a 38% increase over the same quarter last year ($929.2 million), the company says it would’ve seen 47% growth in gross billings had it not been for the changes in foreign exchange rates.

"We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure," said CEO Andrew Mason in a statement. "We've deepened our relationships with a growing base of merchants and customers worldwide, demonstrating progress as we work to unlock the opportunity in local commerce."

Mark Mahaney noted in a Citi Research note that in a survey of merchants, Groupon remains the top choice among businesses considering running a daily deal.  Groupon’s overall market share has increased and merchants’ plans to run a daily deal through Groupon remains high.  In a survey of consumers, Citi found that new product adoption and awareness has increased since last year, with 14% of Groupon customers having bought a Groupon Goods deal last quarter, compared to 0% a year ago.

Of course, Groupon isn’t the only company that has missed expectations.  The economic tumult in Europe has cast a gloomy haze over the earnings reports of several companies—even Apple, which had a surprise miss last month when it came in with $35 billion while analysts were expecting $37 billion.

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