Groupon Generates Buzz As Company Insiders Sell Stock
With Groupon Inc. (NASDAQ:GRPN) preparing to release its third earnings report as a publicly operated company, many investors are hopping aboard the social media train and betting the daily deals site will take off.
However, this isn't the case with Groupon insiders, who have been unloading shares recently.
According to The Wall Street Journal, the cost of putting to use a buying strategy known as a "straddle" jumped on Monday, indicating the stock is expected to move ahead because of some scheduled event. This clashes with insider trading activity reported to the SEC, which shows that in the last three months, company insiders at Groupon have sold $565,780 in shares - not the mark of a company preparing to release a stellar quarterly report.
But still, investors appear to be eating up the company's stock as they await the results, mostly due to the strong performance of similar e-commerce and social sites.
"Social-networking and Internet stocks are all everyone is talking about, because no one is sure what they are going to say," said William Lefkowitz, options strategist for vFinance Investments. "If Groupon says something even a little disappointing, it could drop dramatically."
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