Shares of
Yelp,
the website that gives recommendations for anything from restaurants to dentists, was surging Tuesday after an activist investor encouraged the company to explore strategic alternatives.
TCS Capital Management owns more than 4% of
Yelp
(ticker: YELP), making it one of the biggest shareholders, and believes that
Yelp
could be sold for double the current share price, The Wall Street Journal reported. The size of TCS’s stake hadn’t been revealed before.
The fund’s president, Eric Semler, sent a letter to Yelp’s management with his recommendations to boost returns and said that TCS may make its own bid to acquire Yelp, the Journal reported,
Yelp didn’t immediately respond to a request for comment from Barron’s early Tuesday. Shares climbed 14% to $37.18 in premarket trading.
TCS and Semler won a board seat at the online company
Angi
in 2016. The company was eventually sold to
IAC’s
consumer review site HomeAdvisor.
In the letter to Yelp, Semler said that combining Yelp with Angi would help double the value of Yelp’s shares. He also said that Yelp CEO Jeremy Stoppelman had been overcompensated by the business he co-founded in 2004.
Analysts at KeyBanc said that Yelp seems to get calls to sell itself every four years. It considered a sale in 2019 and in 2015.
“We struggle to see a list of public acquirers who have not already considered bidding on Yelp in the past,” strategists led by Justin Patterson said in a research note.
Write to Brian Swint at [email protected]
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