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While Groupon's business improves, its stock tanks

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Groupon reported solid earnings for its second quarter, but missed analysts expectations, and the stock tanked.

Groupon stock logo
Groupon stock logo

Social stocks just can't catch a break. Groupon announced its second quarter earnings report after the market closed today and the company's profit was better than expected, but its revenue growth was slower than analysts' had hoped. Despite the decent numbers, the stock has tanked, down more than 18 percent in after hours trading. The daily deal king announced earnings of eight cents per share on $568.3 million, with a profit of $28.4 million. Wall Street had been hoping for earnings of 3 cents per share on revenue of $578 million.

Along with Facebook and Zynga, Groupon's share price has taken a beating in recent months. All three have been the target of shareholder lawsuits and both Zynga and Groupon have been accused of insider trading. Given the rough start following their IPOs, it appears the companies must best analysts' expectations by a wide margin to get their stocks moving back in a positive direction. Just running a profitable, growing business is not enough.