Los Angeles Yelp's popular online reviews guide the hungry to the best restaurants, the thirsty to the friendliest bars and the flabby to the toughest personal trainers. But, on the eve of its initial public offering, the eight-year-old, still unprofitable company has yet to convince analysts of its long-term prospects.
San Francisco-based Yelp Inc late Thursday priced its initial public offering of stock at $15 (Dh55) a share. That's above its expected range of $12 and $14 per share. Yelp is selling 7.1 million shares, while its charitable foundation will sell 50,000. Investment bankers also have an option sell an another 1.07 million shares, depending on investor demand.
The offering could raise as much as $123 million before expenses. It values Yelp at $900 million.
That's a lot for a company that hasn't turned a profit since its 2004 founding. Rick Summer, an analyst at Morningstar, says that while Yelp is at "the head of the pack" compared to other review sites, he's concerned that businesses "may not see enough value in [Yelp's] advertising platform to increase spending and justify the expected price of this IPO."
Though it's best known for restaurant reviews, Yelp's users have reviewed other establishments.