Since Yelp (YELP) made its New York Stock Exchange debut Friday morning, the local business review site has exceeded analysts’ expectations.
The company’s estimated value was $900 million. Although the IPO was priced at $15, Yelp opened at $22.01 per share on the New York Stock Exchange Friday morning, and the Washington Post reports that the stock swelled to $26 per share around 10:00 a.m. By noon on Friday, 14.3 million shares of the company’s stock were sold at a price above the expected $12 to $14 per share. The Wall Street Journal noted that Yelp’s was only the fourth IPO out of 22 others this year to price above range.
The popular site boasts 66 million unique visitors per month. As of November, Yelp’s mobile application is listed as the No. 1 free travel app in Apple Inc.’s (AAPL) App Store, with 5.7 million downloads to unique mobile devices.
Although questionable listings from the site’s users were a foreseeable problem, Yelp said in its IPO filing that it had filtered 5 million reviews and removed about 1.8 million of them to try and solve it.
The company’s revenue, which comes mostly from ads, rose 74 percent to $83.3 million in 2011, but the net loss was $16.7 million, compared to the $9.6 million the company lost in 2010.
Stocks for similar businesses like Groupon Inc. (GRPN) and Angie’s List Inc. (ANGI) dropped after their first day of trading. Groupon saw a 30 increase when it debuted in November 2011, but as of Friday, its stock was still trading below its IPO. Angie’s List was ahead of its IPO at $15.79 per share, but was still trading three points below the initial 25 percent increase. The lasting effect of Yelp’s early stock market success remains to be seen.
For more in-depth analyses, check out the original stories at the Wall Street Journal and the Washington Post.
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