Boston, MA 02/14/2014 (wallstreetpr) – LiveDeal Inc. (NASDAQ:LIVE) is seeking to benefit from partnering with small and medium businesses. It has been up scaling its operations and has added New York City to its offering. With this, the platform is available on both the coasts.
The Operations:
Though the platform is quite new, it seeks to partner with small and medium scale businesses across the breadth of the company and offer discounts to its users. In a way, it seeks to mimic Groupon Inc (NASDAQ:GRPN). LiveDeal Inc. (NASDAQ:LIVE) uses geo-location to communicate instant offers to consumers, local businesses can offer flash discounts for a very limited period and consumers can benefit from them. With 42,000 locations in New York City and $33.6 billion in revenues, NYC offers a massive market for LiveDeal.
Surge In Stocks:
However, these factors may not give all the answers to the recent surge in LiveDeal Inc. (NASDAQ:LIVE)’s share prices. There are still fundamental weaknesses remaining in the company. The company has presence in tow big cities; Los Angeles and New York. It will have to cover the geographic breadth of America and bring more businesses under its fold in order to succeed. LiveDeal suffers from poor return on equity, declining net income, and poor profit margins. The operating cash flows are also very weak. The gross profit margin is just 16% and has decreased over the same period last year. Net income has decreased by almost 14% to ($0.96) million as compared to ($0.84) million same period last year. The return on equity trails both the industry as well as S&P 500.
In spite of these factors, the stocks have surged on the stock market. They have touched the 52 week high during today’s intraday trade and are currently up by almost 16%.
Though LiveDeal Inc. (NASDAQ:LIVE) has several positives on its side, the surge in prices is worrisome and may give to a downside. Investors need to tread with caution as the volumes are also on a higher side.
