It looks as if Yelp may go public within the next couple weeks. The site — which provides consumer reviews of local businesses — has set the initial terms of the deal: to sell 7.2 million shares at a price range of $12 to $14. Lead underwriters include Goldman Sachs (NYSE:GS), Citigroup (NYSE:C) and Jefferies (NYSE:JEF). The company plans to list on the NYSE under the symbol YELP.
When it comes to other hot social stocks — such as Groupon (NASDAQ:GRPN), LinkedIn (NYSE:LNKD) and Zynga (NASDAQ:ZNGA) — Yelp has much lower revenues: They came to $83 million last year. In fact, Yelp had a loss of $16.7 million, up from a loss of $9.6 million in 2010. To spur growth, Yelp has been pumping up spending on sales, marketing and product development.
For the most part, Yelp is similar to Angies’ List (NASDAQ:ANGI), which went public last year. That stock has a -5.2% aftermarket return.
Yelp may be one of the few social stocks to go public before Facebook’s IPO, which is expected in late May. As I pointed out in a recent post in the IPO Playbook, this mega public offering is likely to create a black hole for the market.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”, “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.
A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.
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