Yelp Holders Yelping on Wider Loss and Stock Offering
Yelp Inc. (NYSE: YELP) may have the greatest peer-review website out there, but its earnings report is leaving a lot of investors holding the bag after a serious surge. Yelp’s quarterly loss widened out to -$2.3 million. This comes to…
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An issue that may further cloud the earnings report is that Yelp has telegraphed that it plans to sell up to $250 million in Class A shares.
Where the story gets better is on revenue growth. Sales were up 68% to $61.2 million, above the $59.4 million expected by analysts. Yelp’s SG&A, measuring sales and marketing, were up about 60% to $34.1 million. Monthly unique users rose by 41^ to some 117 million. Business accounts were up 61%. Roughly 42% of ads were served up to mobile devices, and about 62% of the search came from mobile as well.
Yelp offered up guidance for the coming quarter of $66 million to $67 million in revenue versus analyst expectations of about $64.8 million.
Where things get dicey for Yelp is in how much the stock has risen, on top of that stock offering. Shares were up 1.8% at $68.83 at the closing bell versus a 52-week range of $16.32 to $75.37. That is a gain of over 300% from the end of 2012. With a market cap of $4.5 billion at the close, Yelp traded at 20-times expected 2013 revenue ahead of the earnings report.
Yelp’s stock price was already lower by about 2% to 3% after the reported earnings, but news of this stock offering after such a huge run up in price now has shares down close to 6% at $65.30 in the after-hours trading session.
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Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
