Yelp IPO: Will It Live Up To Its Hype?

Yelp IPO: Will It Live Up To Its Hype?

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This week the consumer review site Yelp.com will make its debut onto public markets, offering 7.15 million shares of Yelp Inc. (YELP) stock at a price between $12-14 a share. This may raise up to $100 million and value the company at around $838 million. (STAY AHEAD OF THE CURVE: Follow Kapitall on Twitter)

To put the figures into perspective, this valuation is around 10 times current revenues, while Google (another ad-driven internet information company) trades at around 5 times its revenues. Yelp also hasn't made a profit since at least 2007, according to Bloomberg.

However investors' optimism for internet information companies should not be underestimated: LinkedIn Corp. (LNKD) and Zynga Inc. (ZGNA) have both risen more than 20% over the last month, according to Bloomberg.

For Yelp the question that must be resolved in investors' minds will likely be whether Yelp, which receives 70% of its revenue from ads, can stave off competition from larger ad-driven rivals such as Facebook and Google.

Business Section: Investing Ideas

Do you think Yelp's IPO will be a success, or will investor excitement soon fade? For a closer look at the industry, we ran a screen on internet information stocks (such as Google) for those with bullish trends from short sellers.

We screened for stocks with significant decreases in shares shorted month-over-month, indicating short sellers are less bearish on these names.
 
 
Interactive Chart: Use the Compar-O-Matic to compare analyst ratings for the stocks mentioned below:

 

“1. AOL, Inc. (AOL, Earnings, Analysts, Financials): Operates as a Web services company that offers a suite of brands and offerings for the worldwide audience. Shares shorted have decreased from 15.91M to 14.92M over the last month, a decrease which represents about 1.07% of the company's float of 92.37M shares.

 

“2. China Finance Online Co. Ltd. (JRJC, Earnings, Analysts, Financials): Provides online financial and listed company data and information in the People's Republic of China. Shares shorted have decreased from 164.58K to 90.64K over the last month, a decrease which represents about 1.13% of the company's float of 6.56M shares.

 

“3. Shutterfly, Inc. (SFLY, Earnings, Analysts, Financials): Provides an Internet-based social expression and personal publishing service that enables consumers to share, print, and preserve their memories through the medium of photography. Shares shorted have decreased from 6.42M to 6.04M over the last month, a decrease which represents about 1.13% of the company's float of 33.65M shares.

 

“4. SouFun Holdings Ltd. (SFUN, Earnings, Analysts, Financials): Provides marketing, listing, technology, and information consultancy services to real estate and home furnishing industries in the People's Republic of China. Shares shorted have decreased from 1.90M to 1.41M over the last month, a decrease which represents about 4.42% of the company's float of 11.08M shares.

 

“5. Sohu.com Inc. (SOHU, Earnings, Analysts, Financials): Engages in the brand advertising, online gaming, sponsored search, and wireless businesses in China. Shares shorted have decreased from 4.32M to 3.91M over the last month, a decrease which represents about 1.38% of the company's float of 29.79M shares.

 

“6. Travelzoo Inc. (TZOO, Earnings, Analysts, Financials): Publishes travel and entertainment offers from various travel and entertainment companies in North America and Europe. Shares shorted have decreased from 5.00M to 4.18M over the last month, a decrease which represents about 16.27% of the company's float of 5.04M shares.

 

“7. ValueClick, Inc. (VCLK, Earnings, Analysts, Financials): Provides performance-based online advertising campaigns and programs primarily in the United States and the United Kingdom. Shares shorted have decreased from 7.21M to 6.27M over the last month, a decrease which represents about 1.23% of the company's float of 76.22M shares.

 

 

(Written by Alexander Crawford. Short data sourced from Yahoo! Finance.)

 

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One Response to “Yelp IPO: Will It Live Up To Its Hype?”

  1. Yelp doesn't necessarily give me an outlook of what's available in my area. The deals have allowed me to visit the places, see what they offer and find out if the treatment is right for me.

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