Yelp, the site that lets users review everything from diners to dentists, surged as much as 73% in its first day of trading after selling shares for more than planned in an initial public offering.
The stock climbed 63% at 9:47 a.m. Eastern time, to $24.41, after advancing to $26 earlier. The San Francisco-based company raised $107.3 million in the IPO, pricing the shares at $15 each, according to a statement yesterday. The company earlier offered them for $12 to $14.
Yelp competes for local advertising, its largest source of revenue, against larger rivals Google and Facebook. The company, led by CEO Jeremy Stoppelman, planned to start hiring an international sales force this year to begin offering ads in overseas markets, according to a regulatory filing.
"There was a vacuum," said Francis Gaskins, president of IPODesktop.com in Marina del Rey, Calif. "They went in and established themselves, but now there's a lot more competition."
Revenue rose 74% last year, to $83.3 million, with local ads accounting for 70% of that and brand advertising making up most of the rest. The company hasn't posted a profit since at least 2007, according to the prospectus. The proceeds will go toward general-corporate purposes and expansion of Yelp's financial flexibility, according to the filing.--Bloomberg