With 7.15 million shares for sale, Yelp will raise more than $107 million in its IPO. The deal, CNBC stocks editor Bob Pisani tweeted Thursday, is said to be heavily oversubscribed.
Yelp earned $83.3 million in net revenue in 2011, a 74 percent year-over-year jump, but the reviews site, which touts around 66 million monthly unique visitors, also lost $16.7 million during the same period.
Yelp originally filed its papers with the SEC in mid November. The restaurant and business reviews company, which makes a majority of its revenue from local advertising, later amended its S-1 filing to show a starting price of $12 to $14 per share.
“I do think it will probably have a strong opening day, given how small the float is on the stock,” financial data company PrivCo CEO Sam Hamadeh told VentureBeat. “It’s the only consumer Internet IPO currently available, so it will benefit very short-term from the lack of other new supply in the sector.”
A strong opening day, Hamadeh said, would have Yelp’s share price close up by 25 percent.
“Beyond the opening day of trading, we don’t think Yelp will perform well given its many business model issues,” Hamadeh added, citing the company’s inability to turn a profit or dramatically cut losses, a too-high valuation, competition from Facebook and Google, and low annual revenue.
“Yelp can’t seem to be able to lose less as it grows, showing the unattractiveness of a business model based primarily on local advertising salespeople to sell to small local merchants,” Hamadeh explained.
This post was updated with the share price at 5:33 p.m. Pacific.