***** Yelp, Inc. *****

Posted on May 15th, 2012 · Deals Music/Events/Other Stocks

***** Yelp, Inc. *****

Got an interesting “stock play” for you guys…Yelp, Inc. (NASDAQ: YELP—B $20.00–A $20.01)

I’m kinda hoping that you guys know what YELP is!

In a nutshell for those who don’t, Yelp, Inc. owns/operates ( is a website where individuals can write–or–read reviews/comments about all kinds of businesses. In addition to reviews, there are various advertisements/deal-coupons.

Just so you know, I am a regular-Yelp reader…The site has turned me onto some really great restaurants. I also “compare” my restaurant reviews to those of Yelp “reviewers.” By the way, some of those guys really know their stuff.

Yelp, Inc. went public on March 2, 2012 at $15 a share. Since that date its trading range has been $19.36-$31.96. Right now as I type, it’s trading at 20 bucks a share.

Now nothing for nothing, Yelp isn’t the only “site” that has reviews-etc. There are guys like OpenTable, Angie’s List, TripAdvisor–just to name a few. There are also tons and I do mean tons of sites that do “deal” coupons like Groupon and Living Social. The point here, this internet review/coupon/advertising business…is relatively new and is loaded with players. There is absolutely no doubt in my mind, that this “business” has way too many players–is way too crowded and in the coming year or so, will see many of these web-companies “fail.” Let’s get real, how many ” discounted massages” are you gonna buy online? So…

Now, you got to do your own DUE DILIGENCE…but my research “tells” me, that YELP has a real shot at becoming THE dominant player (or at least one of the dominant players) in this particular business segment. I think that the Company’s potential is HUGE. From what I can tell, the public markets haven’t really been paying attention to YELP…it seems that giants like Groupon and Living Social (which is partly owned by Amazon) garner most of the pr–negative/positive. Yelp, seems to be “treated” like a step-child.

Stock research is a strange-animal. The same information may seem positive to me, but negative to you. All I can tell you on the research-front is that in my “travels” I talk to a ton of people—and I’M telling you, that I have found that the population using YELP’s reviews is GIGANTIC. Now so you appreciate this “thing”—reading a review on YELP and YELP generating revenue from your “visit” are two totally different things…and I do mean two totally different things. My research tells me, that YELP’s management is smart enough, nimble enough, clever enough, to convert your eyeballs into hard-cash. Call it a gut feeling, but I’m of the opinion, that the “20 year olds of this world” unlike many of us old farts who took typing classes in junior high school—will eventually “pick” YELP as their favorite. I know it’s a big call, but that’s what I think! When the “collapse” comes to the online coupon business, look for massive corporate failures and consolidations. The bet here, YELP will be the winner, not Groupon, not Social Living, not OpenTable.

Like I said a few seconds ago, MY (operative word here MY) research tells me, that YELP’s stock is going to be a big winner.

If this type of “stuff” is your game, do some homework and see–if you see the “potential” that I do.

By the way, I currently have no Yelp, Inc. position long/or short…and have no intention of taking one druing the next 72 hours.

18 Comments to “***** Yelp, Inc. *****”

  1. Scott says...

    Jeff, to keep it legal you have to disclose if you own the stock, options or bonds. It is called a 15B disclosure and the SEC requires it to anyone recommending stocks in this forum. Just trying to keep you out of the slammer; BTW, how do you look good in stripes??

  2. robert w says...

    Google tried to buy Yelp a year ago I think? They ended up buying Zagat and are trying to make that a more mass market website. I use yelp alot. I used it in the UK just trying to find a decent place in the neighborhood I ended up. You can do this with a smartphone to see what is around you. For me the main thing was to avoid a tourist trap. It let me to an excellent place a block away from where I was. To Scott I dont think somebody has to file anything with the SEC if they give an opinion on a stock. On yahoo boards there are tens of thousands of posts per day.

  3. Burgers Are My Game says...

    i use yelp all the time. great site. jeff, you are right they have to figure out how monetize it.
    scott, jeff doesnt have to say anything about ownership. its just a writers opinion.

    • Scott says...

      Burger, you are wrong. If you recommend the stock to the “world” you must make a 17B disclosure if you own the stock.

  4. MOMO says...

    YELP is a phenomenal site.
    Like others here I use it to find restaurants.
    I like it better than Opentable.
    I have never bought anything from YELP.
    Trick is how they are going to get people to buy things.

  5. Scott says...

    The disclosure is as important to a research report as footnotes are to a corporate financial report. The Securities and Exchange Commission requires that all research reports contain a disclosure statement.

    • STOCKJOCKEY says...

      I agree with Jeff that YELP could emerge as the major force in this social media space.
      As for Scott’s comments, WRONG. Jeff hasnt done a research report, he is just giving a reporter’s view. He tells you to do your own DUE DILIGENCE.

    • robert w says...

      This is not a research report. Nobody online who mentions a stock needs to disclose whether they own it or not.

  6. KLOM1947 says...

    scott, you are a 1,000% wrong.
    jeff doesnt have to say anything.
    he is just voicing an opinion.
    go and check any writer in a newspaper, they talk about stocks and dont tell you positions if any. they are just giving opinions.
    nice try.

  7. LittleBigMam says...

    Love Yelp. Have found some great restaurants there.

  8. anna klein says...

    YELP is a great aid in finding restaurants. The different reviews give me some idea what they are all about. Many times there are also photos and a link to them as well. I have been using YELP for several years and have yet to use one of its advertised offerings. I am also assuming that most people are like me and just read the reviews. How do you expect them to get people to use the deals and thus generate revenue?

  9. Ronny says...

    I wouldn’t bet money on yelp. Its poorly monetized; small, too expensive ads. Real businesses don’t advertise by doing ‘deals’. Discounting is what you do when you don’t know how to do real marketing.

    • Mr. Smitty says...

      This couponing business is oversaturated. No doubt there is going to be a shakeup and consolidation.
      I think that Jeff may be correct that YELP will emerge as the real huge player in this space.

  10. Smitty098 says...

    hey jeff, right now yelp is $14.87. not good.
    still like it?

  11. Ed Robinson says...

    what’s your call now?

    • JeffEats says...

      Ed Robinson & Smitty098:

      Just had a chance to read your comments.

      Facebook’s recent IPO (FB) has put pressure on “social media” stocks.

      I still think YELP has great potential.

      Thanks for reading…

  12. David M says...

    Yelp has a lot of good information but they are being bombarded with bogus reviews, both positive and negative. There are even sites that you can go to and buy positive reviews for your own restaurant and negative ones for your competitor!
    Yelp uses a “magic” review filter,that moves reviews to a hard to find place so that you can’t easily view them.
    Restaurant owners are all over the internet claiming that Yelp has stated that they will remove bad reviews if the restaurant buys advertising on Yelp.

  13. Zellman says...

    Jeff, YELP trading today at $50.24.
    Great call.

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