By Ben Glickman

Shares of Groupon fell sharply early Wednesday after the company cut its full-year guidance and announced a nearly $200 million, higher-interest financing deal to secure more cash.

The stock price fell 23% to $8.68 in premarket trading. It was down about 12% so far this year as of Tuesday's close.

The Chicago digital-coupon company late Tuesday said it now expected revenue to be down 4% to 6% in 2024, compared with its previous expectation for revenue to be flat to down 4%.

Groupon said it expects earnings before interest, tax, depreciation and amortization of $65 million to $70 million for the year. It previously guided for full-year adjusted Ebitda of $65 million to $80 million.

The company also said certain holders of 1.125% convertible senior notes due 2026 had agreed to exchange $176.3 million worth of these notes for newly issued 6.25% convertible senior secured notes due 2027.

The company will sell $21 million worth of those 2027 notes for proceeds of $20 million. The company said it would use the net proceeds for general corporate purposes.

Groupon, as part of the notes deal, agreed to certain terms related to asset sales and other pledges, the company said. If those terms aren't met, the company's notes will accumulate an additional 2.5% in interest per year.

Groupon said the initial conversion rate for the 2027 notes, equal to about $30 a share, represented a premium of about 184% over the stock's 20-day volume-weighted average price as of Monday.

The company on Tuesday also said its revenue fell 9% in the third quarter to $114.5 million. Groupon posted a profit of $13.9 million, or 33 cents a share, in the quarter, compared with a loss of $41.4 million, or $1.31 a share, a year earlier.

Chief Executive Dusan Senkypl said the company had a tough third quarter as its North American business was hit by previously disclosed technical problems with platform migrations. Despite fixing many of these challenges, "we did experience a one-time drop in the retention rates of our legacy customers, which we expect will provide a headwind to future financial performance for a period of time."

It said it expects revenue in 2025 to be flat or up by a low single-digit percentage compared with 2024.

Write to Ben Glickman at ben.glickman@wsj.com

(END) Dow Jones Newswires

November 13, 2024 08:47 ET (13:47 GMT)

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