Will Alibaba Buy Yelp? Not Likely

Yelp Inc YELP shares spiked 3 percent Wednesday on a DAMS Consulting tweet suggesting takeover interest by Alibaba Group Holding Ltd BABA.

However, a source familiar with Alibaba told Benzinga a buyout is "unlikely," and DAMS's track record with stock rumors justifies further skepticism.

Between futile leads of Weight Watchers International, Inc. WTW bids, a First Solar, Inc. FSLR takeover, and a Twitter Inc TWTR split between Facebook Inc FB and Alphabet Inc GOOGL, the source has little credibility.

Additionally, Yelp has been the subject of a number of buyout rumors in recent years, with GrubHub Inc GRUB, Priceline Group Inc PCLN and Tripadvisor Inc TRIP each allegedly expressing interest. This is the second rumor involving Alibaba.

Although the source denied this particular report, takeover plans aren't inconsistent with the company's immediate goals. Alibaba management has long said it aims to spread investments among American companies with exposure in China, and the source highlighted a five-year target.

At time of publication, Alibaba was trading up 0.9 percent, while Yelp was up 2.1 percent.

Nick Donato contributed reporting.

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