YELP IPO

YELP IPO Causes Stir

It’s no secret that the recent IPO market has been dead and this is why the positive sentiment on the upcoming Yelp IPO is causing somewhat of a stir. Especially after high profile deals like Facebook and Zynga were pushed back on the calendar.

It was once reported that Yelp once refused a takeover offer from Google (GOOG:NASDAQ) in the $500 million range. However, the recent Zagat acquisition by Google for $125 million might be creating some urgency for Yelp IPO CEO Jeremy Stoppelman. Especially since Zagat reportedly put itself up for sale with no results in 2008 for the sum of $200 million.

YELP IPO Has Competitors

At this point, Yelp now has a Google backed Zagat as a competitor, which may have played a factor in rushing the Yelp IPO to market. Keep in mind that Yelp also reportedly turned down an offers from Yahoo (YHOO:NASADQ) and one from Google in 2009 for $500 million.

Now will this spell trouble for the San Francisco based consumer review company ? It all depends. As many of our followers know, we provide frequent quality color on new issues and secondary offerings. And we know from experience, that market conditions have as much to do with the first day pop as anything. Look at Pandora (P:NYSE) for instance. Yes, I know that P has been a dog, but the IPO had a monster initial pop despite common knowledge of their limited earnings visibility.

In other words, there is no reason to believe that a much more sound Yelp IPO wouldn’t be at least 20x oversubscribed if this market catches a bid, or even just settles down a little bit. If Europe crumbles or the U.S. economy doesn’t turn around Yelp can always pull the deal and consider takeover offers from companies like Microsoft (MSFT:NASDAQ) or revisit Yahoo. This is pure speculation, but it’s probably safe to say that both are still seeking additional quality content at the right price. Plus YHOO and MSFT currently have enormous cash reserves and Yelp is by most accounts, a market leader.

So check back for additional Yelp IPO updates as the actual pricing comes closer.

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