Excited by its nimble platform, investors have flocked to start-up LiveDeal (LIVE) in droves, causing shares to more than double since the start of the year.
Of particular attraction is LiveDeal’s ability to update instantly, as opposed to daily deals sites like Groupon (GRPN) that only update once a day. This allows restaurants the opportunity to modify, add, or eliminate deals instantly in immediate response to demand.
Stock Market Media Group initiated coverage on LiveDeal on Jan 10, assigning the company a rating of “strong buy” while effusively praising the company, saying “it should prove to be a home run.” Stock Market Media’s report contrasted LiveDeal with rival Groupon, asserting customers would be drawn to LiveDeal because they don’t send “users… endless, irrelevant, untargeted emails” and don’t make customers pre-pay for vouchers.
For its part, Stock Market Media Group are paid consultants, so their word should be taken with a grain of salt. Nevertheless, LiveDeal is indeed soaring, and the report certainly plays into the general bullish current investor sentiment on LiveDeal.
Groupon has long been vulnerable to a more nimble competitor. In 2012 the company finally shed its founder and former CEO, the much-maligned Andrew Mason who was called “the worst CEO” by CNBC. While that addition by subtraction did buoy Groupon, who saw shares skyrocket 120 percent in 2013, the company still languishes at half their early 2012 valuation, and suffers from increasingly mediocre projections.
LiveDeal currently only offers its services in San Diego, Los Angeles, and San Francisco, with business in all three markets greatly exceeding expectations. LiveDeal is expcted to move into other markets rapidly.
As a company, LiveDeal has an interesting history. Originating as a classifieds site in the aftermath of the tech bubble, LiveDeal skyrocketed to $400 a share in 2004 before crashing out, losing 99 percent of its value over the next five years. Yellow Pages acquired the company in 2007 for a scant $12 million.
Since languishing for years, the LiveDeal relaunch has energized investors. LiveDeal has gained 124.78 percent already on the year already to hit $9.11 a share.
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