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February 14, 2016updated 04 Sep 2016 10:18pm

Alibaba buys 5.6% stake in Groupon

It bought 33 million shares in Groupon.

By CBR Staff Writer

Alibaba has acquired 5.6% stake in Groupon, making the company the fourth largest investor in Chicago based deal website, according to a regulatory filing.

Groupon representative Bill Roberts told Bloomberg: "Alibaba has a reputation as a long-term holder, and we’re pleased that they take the same view of Groupon’s opportunity and execution as we do."

Groupon had gone public in 2011 and it has since then been going through troubled times.

Its shares have lost more than 80% of their value and the then CEO Eric Lefkofsky was replaced by Rich Williams in 2015.
With this news, Groupon share value increased by 29%.

The present CEO Rich Williams has significantly increased budget allocations to the marketing department to increase the company’s value and return it to its previous glory.

Groupon CEO Rich Williams told the news agency: "If we do our jobs really well, we’ll beat our plan, the reality is we have a lot of work to do."

"With a 29% increase in share value, Groupon is also confident that there is a huge potential for growth ahead. Williams also said:

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"We are feeling pretty good about our footprint, but we are going to continue to evaluate it opportunistically."

Alibaba has also invested in various other companies such as online retailer Jet.com, augmented reality provider Magic Leap and car-booking company Lyft.

As reported in November, this could be one of Alibaba’s strategy to invest in US SMBs and bring those products to China.

According to Alibaba chairman Jack Ma, high-quality unique products have high demand in the country and, by assisting US businesses, Alibaba look to help companies to become big e-commerce companies like Amazon.

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