Yelp IPO Launches Today, 7.1 Million Shares Up For Grabs
It’s Marcy 2, 2011 that means it’s the official day of the Yelp IPO (initial public offering). The reviews destination website has been priced at $15 a share with 7.1 million shares being offered for a market valuation of approximately $900 million.
That $15 share price is higher than industry estimates which set the price last month in the $12 to $14 range.
Launched 8 years ago Yelp currently offers more than 25 million reviews for restaurants, bars and other businesses and the site is visited by more than 66 million unique users each month.
While the site has a massive following Yelp has never managed to turn a profit and at the time of its IPO the site is more than $40 million in debt.
While analysts believe Yelp shares will just during the first day of trading they warn that Facebook’s upcoming IPO and the local marketing potential for advertisers on the FourSquare platform will likely hurt Yelp’s valuation, making the company a bearish long-term investment.
Speaking to the Associated Press the president of IPOdesktop.com said he was a “little bit skeptical” about Yelp’s future prospects.
“Sooner or later people will be wanting them to make money. They won’t go away,” but “at some point in time, people are going to get tired of them losing money all the time.”
Yelp is a well known destination but in a market where Facebook is constantly eating into advertiser profits it will be interesting to see how the company manages to find a profitable structure that advertisers buy into.
Do you think Yelp is a smart “buy” option in today’s marketplace?
