Jim Cramer's Mad Dash: YELP

NEW YORK (TheStreet) -- On CNBC's "Cramer's Mad Dash" segment, TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, looked at shares of Yelp (YELP) after the Federal Trade Commission revealed it has received 2,046 consumer complaints against the company. 

SunTrust, which has a neutral rating on Yelp shares, said Wednesday's stock selloff was an overreaction to the FTC report, Cramer said. The analyst reasoned that the number of complaints is somewhat irrelevant given how many reviews are on the company's platform. 

This is a hot issue, according to Cramer, who owns a restaurant in Brooklyn, N.Y., and acknowledged how much of an impact negative reviews can be for individual companies.

Some proprietors claim bad reviews will be removed if they become paying members of Yelp or else the negative reviews will increase if the owner refuses to pay. Cramer said he has not experienced this firsthand.

Not surprisingly, CEO Jeremy Stoppelman has denied this allegation, Cramer pointed out.

In the end, he called this news just a "hiccup" for Yelp, which is the "worldwide Yellow Pages" and operates very well on mobile. 

-- Written by Bret Kenwell in Petoskey, Mich.

 

At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.

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