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This company completed an initial public offering (IPO) of its stock in 2010. View articles that reference this company. Recent IPOs: Globe Specialty Metals • LogMeIn • Invesco Mortgage Capital • Medidata • Chemspec |
Yelp (NYSE:YELP) is a local business reviews website. The site allows users to find, search for, and rate local businesses. The site is offered free to its users and makes primarily through advertisements. In addition, businesses can use both free and paid services to help them engage or attract customers. Despite its advertisements, Yelp had not generated a profit at the time of its IPO.[1]
Business Overview
For the full year 2011, Yelp reported a total revenue of $83M. This resulted in a net loss of $16.7M. The previous year, Yelp reported $48M in total revenue and a $9.6M loss. Roughly more than 50% of the total costs and expenses come from sales and marketing. [2]
New Updates
The company's initial public offering of stock on the NYSE occurred on March 1, 2012. The company offered 7.15M shares each for $15. This was above the initial price range of $12-$14. The deal raised a total of approximately $107. The lead mangers of the deal were Goldman Sachs Group (GS) and Citi.[3]
Trends & Forces
Failure to Generate Profits
Yelp has historically been unable to generate a profit. While the company has a relatively large revenue and revenue growth, it is unclear what will be required to gain profitability. The company has a high sales and marketing expense which may not result in large enough revenue. In addition, the company faces competition from other sites which offer review and location based capabilities like Google and Foursquare. These competitors may further cut into Yelp's margins.[4]
- ↑ YELP S-1/A 2012 PROSPECTUS SUMMARY "Overview" pg 1-2
- ↑ YELP S-1/A 2012 PROSPECTUS SUMMARY "SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA" pg 12
- ↑ Renaissance Capital - IPO Home "Reviews website Yelp prices at $15, above the range" 2 March 2012
- ↑ Seeking Alpha "Will Yelp Buyers Be Yelping" 2 March 2012
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