YELP

Andy,

I’ll take a look at YELP. A couple of things though bother me at the very start, before I really get started evaluating.

The first is that they selling at in the range of roughly 20 times sales. That’s a lot.

The second is that for 2014 they expect Adjusted EBITDA to be about $56 million and they expect Stock Based Compensation to be about $44 million. That sounds to me as if they are insider-friendly instead of stockholder-friendly. How do you see it?

Saul

6 Likes

I haven’t looked at them to closely Saul but that Stock Compensation really bothers me.

Thanks,
Andy

2 Likes

Andy,

I just looked on the MF Rule Breaker YELP board and read the first 40 posts (there are only 67). I have never, NEVER, seen such a negative reaction to a MF RB recommendation. Almost all the posts were outraged that RB would recommend YELP which they say has a well merited reputation of pressuring small businesses to buy advertising by removing positive reviews if they don’t agree to buy the ads! Or overloading negative ads. And removing negative reviews from businesses who do buy ads. Wow!

Saul

4 Likes

Almost all the posts were outraged that RB would recommend YELP which they say has a well merited reputation of pressuring small businesses to buy advertising by removing positive reviews if they don’t agree to buy the ads! Or overloading negative ads. And removing negative reviews from businesses who do buy ads

If that is true Saul they won’t be around long. The type of business Yelp has they need to have a sterling reputation with their reviews. Trip went back through their reviews and kicked some of the fake reviews out. Even though it is hard to keep everything completely clean they need to be seen trying to keep it on the up and up.

Andy