Chinese e-commerce giant Alibaba surprised the Wall Street when it revealed in a regulatory filing that it had quietly purchased about 33 million shares of the United States group-buying site Groupon.
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Alibaba has also accumulated stakes in other US companies, including online retailer Jet.com Inc., augmented-reality provider Magic Leap Inc. and car-booking company Lyft Inc. As reported in a release, Alibaba’s lack of major partners in the group buying domain, and the concurrent businessalibab scenario in China, are being cited as significant reasons for an eventual buyout of Groupon.
While Groupon itself said it didn’t know of Alibaba’s stake until the filing, it’s possible both sides will work closer together going forward.
Groupon’s (NASDAQ:GRPN) spokesperson Bill Roberts was quite pleased with the announcement and highlighted that Alibaba has a well-established image for being a long-term shareholder.
Is Alibaba looking to acquire Groupon?
Having struggled since its IPO to spur growth and profits, Groupon replaced Chief Executive Officer Eric Lefkofsky in November. Williams had increased the budget for marketing in an attempt to revive as well as reinvent the one-time darling of the Internet.
Despite reporting a robust earnings and a 29% rise in share price, Groupon’s stock has lost 61% of its value year-to-date (YTD). Its revenue increased from $883.2 million to $917.2 million for the quarter.
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“One of the things you saw in the fourth quarter was faster-than-expected progress on the restructuring side”, Williams said on the conference call. The company has exited 17 countries and now operates in 28 as it continues to streamline its operations internationally.
