Alibaba buys nearly 33 million shares of Groupon

About 37.43 million shares of Groupon have been traded so far today, well above the company’s average trading volume of roughly 12.74 million shares per day. Groupon’s stock rose 41% following the announcement that Chinese eCommerce giant Alibaba had acquired a stake in the company leading to a significant short squeeze as the company had 18% of the public float sold short heading into Tuesday. The daily deals company’s stock climbed for the second straight trading day. Furthermore, Groupon is operating in a larger geographic region than Alibaba, which could mean that it can help Alibaba expand its business in those regions as well.

Groupon Inc. (NASDAQ:GRPN) on Friday posted upbeat financial results for the fourth quarter of fiscal year 2015, after which the stock jumped as much as 20% in pre-market trading. The company has established a trend of investing in startups and not fully acquiring it. Alibaba has already invested in several prominent startups in India including Snapdeal, Paytm, and Flipkart. Jefferies Group reiterated a “hold” rating on shares of Groupon in a report on Saturday.

Earnings per share (EPS) is the portion of a company’s profit that is allocated to each outstanding share of common stock, serving as an indicator of the company’s profitability. Deutsche Bank reiterated a “buy” rating and set a $3.50 target price (down from $3.65) on shares of Groupon in a report on Friday, February 12th.

Out of 16 analysts covering Groupon Inc (NASDAQ:GRPN), 4 rate it “Buy”, 2 “Sell”, while 15 “Hold”.

Alibaba’s stake was reported a day after Groupon reported fourth-quarter results that beat analysts’ estimates, driven by purchases in North America. Creative Planning now owns 86,820 shares of the coupon company’s stock worth $267,000 after buying an additional 78,600 shares during the period. The firm earned $917.17 million during the quarter, compared to analyst estimates of $846.59 million. During the same quarter past year, the company earned $0.06 earnings per share.

Groupon, Inc. operates online local commerce marketplaces world over that connect merchants to clients by offering goods and services at a discount. It’s time for a change.