Groupon, Inc. (GRPN) Call Volume Accelerates After $360 Million Deal

Groupon Inc (GRPN) is selling a 46% stake in one of its overseas businesses

Digital Content Group
Apr 20, 2015 at 12:03 PM
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Groupon Inc (NASDAQ:GRPN) is seeing an uptick in call activity today, after the company confirmed it's selling a 46% stake in its South Korea ticket service, Ticket Monster for $360 million. Overall, nearly 3,700 calls have crossed today -- three times the expected pace -- compared to fewer than 800 puts. It looks like traders are buying to open the May 7.50 call, anticipating GRPN to topple $7.50 by the close on Friday, May 15 -- when front-month options expire.

This is part of a trend among short-term option traders. In fact, GRPN's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.45, meaning call open interest more than doubles put open interest among options expiring in the next three months. Plus, this ratio is lower than two-thirds of comparable readings from the past year.

GRPN May Open Interest

Even so, there's reason to believe that some of this interest in call options is coming from short sellers looking for a hedge, considering 12.5% of GRPN's float is controlled by bearish traders. What's more, it would take over nine sessions to buy back these short bets, at the equity's average daily volumes. More recently, though, it appears some of these pessimistic traders have been losing confidence, with short interest falling 19.2% during the two most recent reporting periods.

On the charts, Groupon Inc (NASDAQ:GRPN) has had a rough year. The shares have traded between $6.75 and $8.50, and were near the middle of this range at last check, 2.1% higher at $7.35. At this price, GRPN is still 11% below its year-to-date breakeven mark.

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