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Yelp Sets IPO Terms

Ian Wyatt

Yelp is the next social media stock in the IPO hopper.

The online-review company has set terms to go public the first week of March. Yelp plans to sell 7.15 million shares at a price between $12 and $14 in its initial public offering. If it succeeds, the company could raise as much as $100 million.

Yelp is a website where users post reviews of local businesses such as restaurants, bars of mechanics in a given area. Like other social media companies that went public in the last year, Yelp has never been profitable since it was founded in 2004.

Social gaming company Zynga (Nasdaq: ZNGA) and daily deals website Groupon (Nasdaq: GRPN) both went public last year despite having never turned a profit. Now each stock is trading below its IPO price.

Yelp will be joining what has suddenly become a red-hot IPO market. Fourteen IPOs have hit the market so far in February. Three more are scheduled to price before the month is out. That’s a far cry from January, when only four companies went public.

The most successful new stocks this year so far have been Guidewire Software (NYSE: GWRE), Greenway (NYSE: GWAY) and Caesars Entertainment (Nasdaq: CZR).

Guidewire, an enterprise software supplier, is up 72% from its late-January IPO price of $13 a share. Greenway Medical Technologies, which provides IT solutions to U.S.  physicians, has climbed 50% to $15 a share from its February 1 IPO price of $10. Caesars, the casino entertainment provider that debuted last week, is already up 41% from its modest IPO price of $9 a share.  

Facebook’s much-anticipated IPO has garnered all the headlines lately. But the social-networking giant doesn’t go public until sometime in May.

Yelp will be the first social-media company in the U.S. to IPO this year. It will begin trading on the New York Stock Exchange under the symbol YELP.