Alibaba surprises the market by buying 33 million shares in Groupon
Last week, Alibaba revealed in an SEC filing that it had bought a 5.6 per cent stake in social deals site Groupon, driving-up share prices for the previously troubled internet retail giant.
The transaction makes Alibaba the fourth-largest owner of Groupon, according to CNN Money. This, coupled with better than expected profits, has surprised Wall Street and driven share prices up.
The company has suffered from interest in the daily deals market slowing down and recently announced that it would cut almost 1000 jobs from international offices. Many rivals, such as LivingSocial have also had to announce staff cuts. Amazon shut down its version, Amazon Local, last year.
At its peak, Groupon had turned down a $6bn offer from Google and, according to CNN Money, even with the recent hike in share price, the business is now worth $2.3bn.
It is not yet known what Alibaba’s reasoning for the investment was but the Chinese internet giant has investments in a wide variety of tech, ecommerce and media businesses, such as Snapchat, Lyft and the China South Morning Post.