Yelp, the popular restaurant review website, just took a beating in the stock market yesterday. The company's stock price closed at $25.06 per share, a 25% drop from the opening bell.
The poor showing in the market comes as a result of lower than expected second-quarter earnings which the company blames on dwindling revenues from digital ads. The disappointing figures also prompted PayPal cofounder Max Levchin to resign from his post as chairman of the company. In an official statement Yelp CEO Jeremy Stoppelman had this to say:
"We thank Max for all his contributions to Yelp since its founding in 2004 when he provided the seed capital to start the company, Max saw Yelp grow from just an idea in my head to a company worth billions of dollars with Yelpers around the world. We have mutually agreed this is the right time for him to step down, given the demands on his time. I am grateful for his contributions to Yelp's success and wish him all the best going forward."
This latest bit of bad news continues a worrying trend for Yelp. Eater notes that since the Company's stock peaked at $97.25 in March 2014, it has gone on to tank 75% over the next 16 months.
Despite the alarming trends, some analysts believe that the company can still bounce back. Yelp is still valued at $3.1 - $3.5 billion and users still flock to the platform. CNN Money notes:
"While Yelp's growth numbers have slowed down, it's not like the brand is irrelevant. More people are still coming to the site compared to the prior year, and total reviews grew by 35% over the past year. That means people are still using the service."
Will Yelp regain ground? Or is a high profile acquisition on the cards? We'll have to wait and see.
