At a share price of between $12 and 14, Yelp intends to raise some 100 million dollars in March through an IPO. The reviews company is a staple among websites that focus on local businesses. Yelp intends to sell around 7.15 million shares in the public offering. Founded in 2004, Yelp has raised $56 million over several rounds, according to CrunchBase.
However, the company is not in financial green pastures. On net revenues of $83.3 million last year, Yelp lost $16.9 million. Its revenues were up 75% year over year, but its losses rose by a similar 74%. According to the New York Times, at the middle of its expected initial stock price, Yelp would be valued at $778 million.
Yelp has never had a yearly profit, losing money every year since it was born.
While the IPO market for technology companies has been open, if not exceptionally forgiving, the market reception of this IPO, which is less fundamentally sound from a technical perspective than other profitable tech firms, will be a bellweather. If Yelp finds open arms from investors, it could lead to increased activity. A frigid reception could delay others from making the same move.
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