Groupon Inc (NASDAQ:GRPN) has drastically moved up the charts following the news that the Chinese ecommerce giant, Alibaba, had bought a 5.6% share in the company. The sale had been valued at an estimated $33 million or $3 per share. Groupon has faced a series of ups and downs, since its IPO in 2011. The company had initially surprised many, by attracting acquisition opportunities from giants, like Google, but has also failed to impress since its IPO.

Now it seems that history would be repeating itself, since the stake purchased by Alibaba helped GRPN to close above $4 per share. However, the question about whether or not this was a smart decision by Alibaba, still remains. Groupon’s recent past paints a very grim picture for the company. In October 2015, the company had announced that it would be laying-off a total of 1,100 workers, in a bid to streamline its operations. Additionally, the management had also hinted that the company was considering stopping operations in several countries. It should be noted here that the company had already ceased its operations in Turkey, Greece and India.

A spokesman for Alibaba has stated that the company believes that it can share its experiences and the secrets of its success with Groupon, so as to help the company perform better in its respective markets. He also stated that Alibaba would only assume a passive role in the company and not an activist one. In its latest earnings report, GRPN had reported a net operating loss, worth $79,777, while the revenues stood at $3.1 million. Hopefully this situation would change with time.

Alibaba on the other hand has been actively investing in US based tech companies, startups in particular. However, the Chinese ecommerce giant is being cautious in acquiring partial stakes in these firms, rather than a complete acquisition.

Groupon Inc (NASDAQ:GRPN) gained a total of 41.18% during the February 16 session, to reach a close at $4.08 per share.