To be completely fair, investors and consumers alike may understandably roll their eyes regarding any news from, or about, any online-coupon "daily deals" site. We've been down that road before, with names like Groupon Inc. (NASDAQ:GRPN) and LivingSocial. While both sites were interesting and had their day in the sun, it didn't take long for either to lose their luster. And for GRPN, it didn't take long for its early investors to lose a lot of their money. The daily deals premise never really went away, though. It's just been morphing - and right-sizing - into something that's a win for all the parties involved. That's why Groupon and LivingSocial are still around, even if they're just limping by... the premise itself basically works. What if, however, there was a daily deals site that wasn't too far down the wrong digital-coupon path? Enter LiveDeal Inc. (NASDAQ:LIVE).
Don't sweat it if you haven't heard of LiveDeal; most investors haven't. Though not a newcomer to consumers or to investors (LIVE has been publicly traded since 2005), it's not been a prolific name. And, as it stands right now, LiveDeal Inc. is still only a $12.9 million entity versus the Groupon market cap of $6.9 billion. That small size, however, has allowed LIVE to adapt quickly, learning from the mistakes GRPN made but couldn't easily fix. The end result is, LiveDeal is getting good traction.
What is LiveDeal? In simplest terms, it's a real-time restaurant-marketing platform, giving access to the restaurants themselves to offer deals and coupons "on the fly", in real time.... as in "this morning's fresh seafood catch includes an abundance of lobster that we have to serve tonight so here's the special" kind of access. That contrasts with Groupon, which generally needs at least a day to establish a new offer, and contrasts with LivingSocial, in that it can take several days for a retailer or service provider to get an item featured on the deal-oriented website.
The speed of getting a deal up and on the site has made the company a hit with restaurateurs in San Diego, where the new business model was unveiled a few weeks ago. Per today's news release, LiveDeal Inc. will be introducing the same real-time couponing offer in Los Angeles. Eventually, it aims to unveil the service in many of the nation's metropolitan areas. The key for LIVE shareholders, however, is that the concept is proven, and it's scalable... something investors have been waiting for.
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The announcement is also the reason the stock popped today, though the reason a newcomer may want to be willing to wade into a LiveDeal Inc. position is far more compelling than one day's strength; one really good day like today is just an invitation to take some profits. No, the compelling part about LIVE here is that the breakout has been brewing for weeks, and today's pop is just another layer of evidence to that end.
To put things in the right perspective, you have to zoom out to a weekly chart of LiveDeal shares. It's here we can see that (1) the stock make a lower low in October, (2) the current rally is unfurling on strong volume, and (3) shares are finding support at its key moving average lines. Translation: The tide has turned for the stock, not unlike the tide has turned for the company.
None of this is to say LiveDeal is going to unseat Groupon from its throne or become the next LivingSocial. On the other hand, LIVE doesn't have to topple GRPN or LivingSocial to offer a compelling prospect for investors. Time to take a swing.
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