Yelp exploring sale, looking for buyer
Shares in Yelp rose as much as 16 percent on Thursday after a report revealed that the go-to site for crowdsourced reviews is exploring a sale.
According to the Wall Street Journal, Yelp is working with investment bankers to court potential suitors.
Yelp has been in touch with potential buyers in recent weeks, the WSJ said, citing people familiar with the matter. The Journal said that it could fetch as much as $3.5 billion in a sale.
According to Thomson Reuters data, Yelp, which went public in 2012, had a market value of about $2.86 billion as of Wednesday.
Kerry Rice, an analyst at Needham & Co., told Bloomberg that the acquisition would be good for “Google Inc., Yahoo! Inc., Facebook Inc. or even travel sites such as Priceline Group Inc. and TripAdvisor Inc.”
Yelp’s stock plunged to its lowest level in nearly two years last week. Ad sales declined, which raised concerns that the firm is losing its share of major advertisers.
The San-Francisco-based company, founded in 2004, has grown from being an email service for swapping recommendations to one of the most popular websites in the US for reviewing businesses.
In the first quarter of the year the website received 143 million unique visitors, an increase of 7.6 percent from a year earlier.
It is important to note that the WSJ said that it is possible that Yelp could decide against a sale altogether.
This is also not the first time rumors have surfaced of Yelp being a takeover target.