Yelp Stock Soars: Activist Investor Recommends Exploring Sale At Double Value

Activist investor TCS Capital Management has built a stake in Yelp Inc YELP and urged the service-recommendation site to explore strategic alternatives, including a sale.

TCS Capital believes that Yelp could be sold to another technology or media company or private-equity buyer for at least $70 a share—or more than double the current stock price, the Wall Street Journal cites a letter the fund's founder and president, Eric Semler plans to deliver to Yelp's board Tuesday.

Semler also proposes to tell Yelp's board that his investment firm is looking to make its bid to acquire Yelp, with a group that includes an executive who has served as CEO of a public company in the same business.

Alternatively, Yelp could explore a tax-free merger with online services company Angi, formerly Angie's List.

TCS Capital owns over 4% of the shares outstanding of Yelp, making it one of the company's five most significant shareholders.

TCS Capital has been an investor in Yelp for most of the past five years.

Semler believes combining Yelp and Angi would yield enormous revenue synergies and cost savings that could double the value of Yelp's shares and create a powerhouse player.

Yelp's longstanding CEO, Jeremy Stoppelman, co-founded the business in 2004 and has been CEO for nearly two decades.

Semler flagged Stoppelman's unconscionable compensation packages and Yelp's board of directors' lack of industry experience.

Despite ongoing pressures in the broader advertising market, Yelp has kept increasing sales. 

Price Action: YELP shares traded higher by 9.75% at $35.69 on the last check Tuesday.

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