Don't Believe The Reports, Axiom Says: Yelp Couldn't Find A Buyer
Anthony said that his view is that "Yelp did not find a buyer."
The news sent the stock down 10 percent, falling from $42 to $38.20.
Yelp investors touted potential buyers, such as Google Inc (NASDAQ: GOOG), Facebook Inc (NASDAQ: FB) and Yahoo! Inc. (NASDAQ: YHOO). However, Anthony said these were always "unlikely" suitors. Previously, IAC/InterActiveCorp (NASDAQ: IACI) CEO Barry Diller, another potential buyer, said publicly that he was not interested in purchasing Yelp.
Anthony argued that both Google and Facebook are "organically replicating" Yelp's benefits, with Facebook even allowing some restaurant bookings via its platform. Facebook is also "piloting a new feature that will show critic reviews for select restaurants across America." Ultimately that will put it in "direct competition" with Yelp.
Anthony did suggest that Yahoo could benefit from the local business market opportunity that a Yelp acquisition would bring; however, he noted that with a $4 billion plus valuation, Yahoo would certainly "see meaningful investor pushback if they offer to buy Yelp."
Further, now that it is not for sale, Anthony said that Yelp faces "a series of structural issues," some of which include "declining salesforce productivity," "advertiser attrition," and "difficulty scaling monetization in international markets."
Axiom maintained a Hold rating and a $40 price target on the shares.
Image credit: Nan Palmero, Flickr
Latest Ratings for YELP
|Dec 2016||Aegis Capital||Initiates Coverage On||Buy|
|Aug 2016||Deutsche Bank||Maintains||Buy|
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