This has also got District-based LivingSocial worry, as some analysts believe that Groupon’s slashed shares can have a direct impact on the former’s value when it predictably goes public or tries to raise more capital. Jordan Rohan, Managing Director at Stifel Nicolaus said that LivingSocial is trying to change analysts’ view and is working hard to show profitability and a different consumer offering. Offering discounts to users on daily deals online, LivingSocial is a direct competitor of Groupon. The firm tried to prove to be better than its rivals and even hosted one-time events, such as beer festivals and sushi-making classes. It also created a multipurpose activity venue to attract users. However, LivingSocial revealed at a media day in June, that company gets most of its revenue from its business of offering daily deals to users. It further stated discounted travel getaways to be the sector that supplies in the second largest amount. Groupon Inc. also provides same services to consumers. Daniel Kurnos, analyst, Benchmark Capital believes that plunged stocks of Groupon will certainly have an effect on the valuations of LivingSocial as both are similar and in fact Groupon is the biggest of two. The Chicago-based company, Groupon saw a slow growth rate as expected. However, the firm saw a profit in the most recent quarter. It posted operating income of $46.5 million for the 2Q, which was up from a loss of $101 million during the same period in 2011. LivingSocial executives however, declared that the firm has no immediate plans to go public. Rohan, MD at Stifel Nicolaus said, “It could change. But right now it doesn’t appear like the market would be receptive to the valuations that would make the investors behind LivingSocial excited about going public.” LivingSocial however, is reported to go through many challenges in recent weeks. The company confirmed the news of closing up its business in the Middle East. It started business into some Arab countries after acquiring GoNabIt last June. Andrew Weinstein, Spokesman of LivingSocial said executives took the decision to shut operations that didn’t lead to profit, after reviewing the firm’s domestic and international markets earlier this year. The news hit the headlines following the firing of top three executives and nine employees by LivingSocial in July as it plans to reform some of its District-based units. The company also announced opening up of a customer service call center in Tucson, which has cheaper business and living costs.
