Yelp soars in market debut on Facebook optimism
By Nicola Leske
(Reuters) - Consumer review website Yelp Inc made a sparkling market debut on Friday, buoyed by optimism ahead of Facebook's public listing and hopes for further successful public listings by Internet companies down the road.
Yelp's stock closed 64 percent higher at $24.58, a day after Yelp priced its IPO at $15 a share - above its indicated range of $12 to $14.
At Friday's closing price, the company is worth about $1.47 billion - about 17 times its 2011 revenue.
"If you look at it, there's been a very high trading volume, much higher than normal," said Scott Rostan, a former Merrill Lynch analyst who founded Training The Street, an investment banking school in New York.
Yelp could be benefitting from the optimism about Facebook's upcoming IPO, he added. "Investors are getting a little excited; there's a social media momentum."
Yelp's stellar debut follows those of other Internet sensations like LinkedIn Corp, Groupon Inc and Zillow Inc. But while those stocks made large first-day gains, they have since declined.
Groupon stock's soared as much as 56 percent on its opening day, but has since fallen below its offer price of $20.
Like Yelp, Groupon is losing money. Yelp generates revenue by selling advertising on its sites, where it has more than 25 million reviews of a range of local businesses and services - from plumbers and shoe-repair shops to restaurants and nightlife options. Continued...