We did witness some analyst upgrades today as both Stern Agee and also Citigroup raised their ratings to Buy from Hold after the earnings. What may be driving shares the most today is continued short covering. If you take a look below, you can see the settlement data for the short interest based on each settlement date but keep in mind that Groupon now trades only about 2.62 million shares on an average day:
Date….. Short Int.
4/30/2012 17,427,665
4/13/2012 19,210,861
3/30/2012 23,338,658
3/15/2012 21,675,204
2/29/2012 19,026,896
2/15/2012 18,396,790
1/31/2012 16,920,424
1/13/2012 16,484,330
12/30/2011 17,328,422
12/15/2011 14,796,819
11/30/2011 7,637,404
11/15/2011 2,919,091
If you include the after-hours session from Monday, volume was 16.2 million shares on Monday. Only one day last week saw more than 2 million shares traded in a day. If this is not a classic short-covering then nothing else is.
Another issue today is that as of 1:30 PM EST we have already seen some 28,000 call options trade for the May expiration alone and over 10,000 of the June expiration calls trade. That is the equivalent of another 2.8 million shares and 1 million shares if you convert options contracts as 1 contract per 100 shares on a fully leveraged basis.
What is interesting is the put option volume today. If you look at the June put options there have been almost 22,000 contracts and in the June expirations we have seen over 20,000 put options trade in the June contracts.
Groupon shares are currently up 11.5% at $13.09 and the post-IPO range is $9.63 to $31.14. Groupon was a $9.90 stock at the close of trading on Friday.
JON C. OGG
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