Top Yelp Investor Calls for Sweeping Changes
Shares of Yelp Inc. (YELP) - Get Report climbed 2.2% to $35.75 after the search company responded to a call from one of its largest investors to follow its recommendations.
Declaring that "time is of the essence," SQN Investors LP, which owns more than a 4% stake in Yelp and is one of the top five investors, said an immediate sale to a private-equity firm could yield a $47 to $50 stock price, or a 36% to 45% premium, while a sale to a strategic acquirer could yield an even higher premium.
"Yelp's Board is stale, with no new members added since May 2012," the Redwood City, California-based hedge fund said in a presentation. "We believe it has failed to hold the CEO accountable for shifting strategies, missed opportunities, and dismal execution. Yelp's stockholder-unfriendly governance structure has severely limited stockholders' ability to seek recourse."
SQN said in its presentation that Yelp has underperformed the Russell 2000 Technology Index by 117% and its own proxy peer group by 74% over the last five years and has missed investor expectations in 12 out of the last 19 quarters.
"Stockholders must capitalize on the opportunity to replace three out of 8 Directors on Yelp's staggered board in 2019 with candidates not handpicked by the existing board," SQN said. "The new Board should also include stockholder representation."
In a statement, San Francisco-based Yelp said that its "board and management team are focused on taking actions to deliver on our disciplined strategy to achieve sustained, long-term growth and create shareholder value."
"Yelp is open to hearing any ideas and investor input, including from SQN," the statement said. "We remain willing and open to meeting with SQN to hear their perspectives on the topics they have previously raised, all of which are items on which the Board has already been engaged. We will also review SQN's latest presentation."
Yelp said it was looking forward "to engaging further with (SQN Founder Amish Mehta) so we can take his perspectives into consideration along with the perspectives of our other investors."
Yelp said its board and nominating and corporate governance committee "are in the process, with the support of a nationally recognized director search firm, of evaluating its composition and identifying additional Board candidates to help drive our strategy."
Live Thursday: Jim Cramer Unveils His Top 10 Tips for a Bear Market
Join Jim Cramer on Thursday at 11:30 a.m. ET when he unveils his "10 Lessons for a Bear Market." Jim will release his tips during a live monthly videoconference call with his Actions Alerts PLUS club for investors. The call is normally for members only, but Jim is opening it to the public this month for the first time ever. Register now and join in!
///
URL = https://offers.thestreet.com/aap-monthly-call-gate/
