Online reviews site Yelp Inc (NYSE:YELP) has seen a
sharp spike in its shares which even a lock-up expiry on August 29 was not able
to dent.
In the last few weeks the stock has risen more than 30
percent, which analysts say is due to short covering and optimistic outlook of
the company's earnings.
The shorting of the stock was done in the run-up to
its lock-up expiry as many investors were fearing large sell-off of shares as happened in the
case of social networking site Facebook and daily deals site Groupon.
However on the day of expiry when investors saw that
large insider investors were sticking to their holdings and not offloading
them, it created an atmosphere of confidence and triggered a wave of buying and
short-covering of open positions.
The question now is whether this rally can be
sustained over a longer period of time.
Get Complete
Analysis On YELP Here
Yelp essentially provides a platform where customers
and users of products can review local businesses and recommend them based on
their own experiences.
Prospective customers can see the ratings of
businesses like hotels, restaurants, dental services etc., read reviews and
make informed purchase decisions.
The local businesses and service providers advertise
on Yelp which gets its revenues therein. It also gets additional revenues from
extra services such as Yelp deals.
The company has also successfully monetised its mobile
subscriber base as Chief Executive Jeremy Stoppleman recently said that
click-throughs on its mobile site has shown significant improvement compared to
desktop traffic.
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