A year ago, Yelp was making a small but still respectable $2.7 million profit, but that number has transformed into a $1.3 million loss. Even with the company raising its revenue by more than 50% year-on-year and increasing the number of reviews posted to its service by 35%, Yelp is still losing money. Investors are no longer confident in the company’s ability to make money and this is causing Yelp’s stock price to plummet.
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Yelp is in big trouble if it can’t reverse its losses
Theregister
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Published July 29, 2015
TECHi's Take
Yelp is in full crisis mode as the upstart’s chairman is out – and its stock continues to free fall. The reviews website, headquartered in San Francisco’s startup land, announced on Wednesday that a modest $2.7m profit in the second quarter of 2014 had turned into a loss of $1.3m in the second quarter of 2015. This is despite Yelp raising revenues by 51 per cent, year on year, to $133.9m, and increasing the number of total reviews by 35 per cent over the 2014 quarter. Net loss for the first two quarters of Yelp’s 2015 fiscal year now sits at $2.6m. The same six months in 2014 had Yelp at $100,000 in the black. Yelp’s second quarter ended June 30. Investors were not thrilled with the results, to say the least. As of 12:45PM Eastern time, the New York Stock Exchange reported Yelp shares were down 28 per cent, trading at $24.06, compared to yesterday’s $33.51 closing price.
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