Sam Boughedda

Investing.com — The shares of Groupon Inc (NASDAQ) shares fell by more than 16% Wednesday following SumUp’s announcement of a 2.4% stake.

It may not appear like a problem, but the stake could be. Groupon’s shares have risen significantly in recent years due to Prescience Point Capital’s stake in the company, as investment research firm Prescience Point Capital stated. was in the “mid-single digits.”

Prescience issued a Monday note about Groupon, in which they stated that there was a potential 225% increase in stock prices based upon their SumUp stake. Prescience asked Groupon to reveal its SumUp stake.

Groupon responded to that request. Groupon answered the call by answering “What companies does Groupon currently invest in?” On its FAQ pageThe e-commerce company that operates online marketplaces answered the question, “Has a 2.4% non controlling ownership interest in SumUp Holdings.” This is lower than what Prescience estimated.

Prescience did not initially believe that Prescience would have a lower stake. However, Prescience still believes in the Groupon thesis and stated that it believed that Groupon’s recent public disclosures about its SumUp stake, along with news regarding SumUp’s funding round, “confirms the investment’s tremendous value.”

Prescience stated that “with any remaining conjecture laid to rest investors might now shift their attention towards a series positive catalysts which will drive Groupon shares substantially higher in the short-term,” Prescience explained.

Groupon believes SumUp’s investment in SumUp is worth $15 per Share. Groupon has a base case price target of $69.92 with a bull target price at $99.32.