Sometimes having a website go down is a great thing for competitors. The daily deals site LivingSocial went down on Tuesday, and at noon Wednesday it was still down. News like this is music to the ears of a company like Groupon, Inc. (GRPN).
Groupon shares have not rapidly responded as the gain is only 0.4% in the share price. The issue here is how long the daily deals website from Living Social stays down. It might not be a zero sum game that having a daily deals service down at one site translates to immediate dollar for dollar sales at a rival site. That just would not be real as far as an expectation, but it does act as marketing for Groupon.
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The reality is that all websites go down. The secondary impact is that it keeps revenues from occurring. It just depends upon the outage time, and when that outage happens on the calendar.
Groupon can use all the help it can find. Living Social going down is just one small bump for it.
Groupon shares are up 0.4% at $10.32 against a 52-week range of $2.65 to $12.76. The consensus price target from Thomson Reuters is $11.81 and the market cap is $6.9 billion.
Here is the image of what the LivingSocial website looked like mid-day on Wednesday. We would like to ask the repair robot one question: "What are you smiling about?"
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