The popular user-review website Yelp is ready to join the public markets this spring. It will try to raise up to $100 million in its upcoming IPO.
In a regulatory filing on Thursday, the San Francisco-based company said it plans to offer 7.15 million shares for $12 to $14 each, according to Bloomberg. March 1 will be its pricing day and the stock will trade with the ticker YELP on the New York Stock Exchange beginning on March 2.
The company initially filed in November for its offering. It comes on the heels of 2011 Internet public offerings by Groupon Inc., Zynga Inc. and LinkedIn Corp.
In 2011, Yelp’s net loss expanded to $16.7 million, up from 2010's $9.6 million. This came on increased marketing and product-development spending, which both saw 50 percent rises. Revenue increased 74 percent to $83.3 million.
Yelp has warned that its escalating top-line growth rate is not manageable but as the business advances, it should slow down. The company's website reviews encompass most of the major U.S. markets but it was expanded internationally, reported Dow Jones.
The company's IPO represents the first one of 2012 for a major Internet company. Facebook Inc.'s highly anticipating entrance to the public markets had been initiated with a Feb. 1 filing with an intention to raise $5 billion but the company did not set terms.
By looking at Yelp's price range at the midpoint, the company's offering could see a $778 million value. How does this compare to Yelp's competitors? This comes in high compared at 5.2 times for Google Inc. and 3.8 times for Yahoo! Inc.
According to Jack Albin, chief investment officer at Chicago's Harris Private Bank, “The initial valuation seems high relative to their peers. I’m not sure where their huge growth catalyst is going to come from."
Additional IPO Nuggets
Also in Thursday's filing, Yelp listed its monthly average basis for the Dec. 31 ending quarter at about 66 million unique visitors. It noted its total reviews of local businesses including dentists, mechanics and salons topped 25 million.
Investment bank assistance will come from lead Goldman Sachs Group Inc., along with help from Citigroup Inc. and Jefferies & Co. Yelp's largest stakeholder is Bessemer Venture Partners at 22.1 percent, with Elevation Partners closely behind at 22 percent and Benchmark Capital with 15.9 percent.
Yelp's chairman Max Levchin has a 13.5 percent ownership of the company; Founder and Chief Executive Officer Jeremy Stoppelman has a 11.1 percent ownership stake.
While the company plans to sell 7.1 million shares for the IPO, its Yelp Foundation will sell 50,000 shares, according to Bloomberg. The proceeds will be used for marketing and capital expenses.
An additional 1.07 million shares may by sold through an option by investment bankers.