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Berger: Looking for a good deal from Groupon

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Online and social media stocks have experienced a resurgence as M&A activity in the online space continues. Serge Berger, the "Steady Trader", views the announcement of recent acquisition deals as a crucial turning point for the online space.

In April and May the vast majority of these same stocks took a sharp drive as concerns over a bubble and stagnant growth circulated. The stocks have since stabilised, rather than re-bounding in a V-shape pattern. According to Serge, this is a positive sign the market could be posed for a recovery. One stock in particular, Groupon, has caught Serge’s attention.

Groupon’s stock price jumped 5 percent last Friday after Priceline announced it had acquired OpenTable. Priceline will pay USD 2.6 billion for the online reservation website, or USD 103 a share. The 46 percent premium being paid for OpenTable has sparked an interest in the possibility of other acquisitions. Yelp and GrubHub also experienced a rise, moving up 9 percent and 8.5 percent respectively. Overall, this M&A activity has signaled a revival for the online consumer service space.

Serge is looking to buy the stock at USD 6.40 with a target price of USD 7.00. A stop can be placed at USD 6.10.

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