Apple Inc. (NASDAQ:AAPL) should set its sights on Yelp, according to CNBC’s Jim Cramer. Yelp Inc (NYSE:YELP) shares rose 25 percent during the regular trading day on Thursday thanks to the company’s strong earnings report and Cramer’s bullish comments. Speaking on “Squawk on the Street,” he predicted that the company’s stock would go up to between $50 and $55 per share.
Yelp is the “holy grail trinity of tech”
According to Cramer, Apple Inc. (NASDAQ:AAPL) should look at acquiring Yelp Inc (NYSE:YELP) at a value of $75 per share. The company still posted a quarterly loss, but it was still less than expected as its results were boosted by its mobile advertising business.
“Don’t underrate Yelp, because they have a model that works better on mobile than it does on desktop,” he told CNBC. “This is the portable Yellow Pages. These guys do it on the Web. It is social, it is mobile, it is cloud. It is the holy grail trinity of tech.”
Why Apple should be interested in Yelp
Cramer believes Yelp is Apple Inc. (NASDAQ:AAPL)’s answer to fight back against competitors like Facebook Inc (NASDAQ:FB) and Google Inc (NASDAQ:GOOG). He said it brings the company social and mobile components to add to the cloud components it already holds. He said a deal between Apple and Yelp just makes sense for Apple.
At $75 per share, it would give Yelp Inc (NYSE:YELP) a $4.83 billion valuation, which was about a 50 percent increase from where the company’s stock was trading before the markets opened this morning. So far shares of Yelp have more than doubled since the company’s initial public offering in March of last year.
The company said that during the second quarter of the year, approximately 40 percent of its local ads were seen on mobile devices, while 59 percent of its searchers were conducted on mobile devices, including both Yelp’s mobile app and also the Web.