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CHICAGO - Groupon, Inc. (NASDAQ:GRPN), currently trading near its 52-week high of $36.42 with a market capitalization of $1.43 billion, announced Wednesday it has entered into agreements with certain holders of its existing convertible notes to exchange $170 million of debt for newly issued 4.875% Convertible Senior Notes due 2030. According to InvestingPro data, the company operates with a moderate debt level and maintains impressive gross profit margins of over 90%.
Under the agreements, Groupon will exchange $20 million of its 1.125% Convertible Senior Notes due 2026 and $150 million of its 6.25% Convertible Senior Secured Notes due 2027 for $244.07 million in aggregate principal amount of the new 2030 Notes. This debt restructuring comes as InvestingPro analysis shows the company has delivered strong returns, with the stock price surging over 230% in the past six months. Discover more insights with InvestingPro’s comprehensive research report, available for over 1,400 US stocks.
The 2030 Notes will be senior unsecured obligations with interest payable semiannually. They will be convertible into cash, shares of Groupon’s common stock, or a combination of both, at the company’s election.
The initial conversion rate is 18.5031 shares per $1,000 principal amount, equivalent to a conversion price of approximately $54.04 per share, representing a 50% premium over Groupon’s closing stock price on June 17.
Holders of approximately 76% of the outstanding 2027 Notes have agreed to vote in favor of amendments that would remove most restrictive covenants and release all collateral securing obligations under those notes.
The exchange is expected to close around July 2, 2025, subject to customary closing conditions.
The 2030 Notes and any shares potentially issuable upon conversion have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States without registration or an applicable exemption.
J. Wood Capital Advisors LLC served as advisor to Groupon in the exchange, with Winston & Strawn LLP providing legal counsel, according to the company’s press release statement.
In other recent news, Groupon reported impressive first-quarter 2025 earnings, exceeding Wall Street expectations with an earnings per share of $0.17, compared to a forecast of -$0.10. The company’s revenue also surpassed projections, reaching $117.19 million against an anticipated $115.67 million. This performance led Groupon to raise its full-year billings growth guidance from 2-4% to 3-5%. Analysts at Northland have responded positively to these developments, raising their price target for Groupon to $35 from $30 while maintaining an Outperform rating, reflecting confidence in the company’s growth prospects.
In contrast, Goldman Sachs raised its price target to $15 but maintained a Sell rating, indicating a more cautious outlook. The first quarter also saw Groupon’s North America Local Billings grow by 11% year-over-year, marking significant progress for the company. However, a short-seller report from Captain’s Log has raised concerns, questioning the sustainability of Groupon’s business model and alleging misleading growth in its North America Local segment. The report accuses Groupon of reclassifying sales to bolster its growth figures, which has led to skepticism among investors.
Despite these allegations, Groupon continues to focus on enhancing its platform and integrating AI to improve customer and merchant engagement. The company also completed the sale of Giftcloud in April, which is expected to slightly reduce its 2025 revenue and adjusted EBITDA. These mixed developments have left investors weighing the potential impact on Groupon’s future performance.
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