Yelp whelps yelp 'Help!' Chairman ejects, shares plunge 30%, losses grow

We'll give these financial figures one star out of five

Yelp is in full crisis mode as the upstart's chairman is out – and its stock continues to free fall.

The reviews website, headquartered in San Francisco's startup land, announced on Wednesday that a modest $2.7m profit in the second quarter of 2014 had turned into a loss of $1.3m in the second quarter of 2015. This is despite Yelp raising revenues by 51 per cent, year on year, to $133.9m, and increasing the number of total reviews by 35 per cent over the 2014 quarter.

Net loss for the first two quarters of Yelp's 2015 fiscal year now sits at $2.6m. The same six months in 2014 had Yelp at $100,000 in the black. Yelp's second quarter ended June 30.

Investors were not thrilled with the results, to say the least. As of 12:45PM Eastern time, the New York Stock Exchange reported Yelp shares were down 28 per cent, trading at $24.06, compared to yesterday's $33.51 closing price.

Analysts credited the stock plunge to a loss of confidence by investors after Yelp failed to live up to the expectations placed on it since its 2012 initial public offering.

As a result of the poor numbers, Yelp said it is going to drop its brand advertising service, which posted an eight per cent decline last quarter, and focus on selling local ads instead.

The reviews site is also parting ways with board chairman Max Levchin.

A serial entrepreneur and former PayPal exec, Levchin had served on Yelp's board of directors since its founding in 2004.

"Max saw Yelp grow from just an idea in my head to a company worth billions of dollars with Yelpers around the world," Yelp CEO Jeremy Stoppelman said in a canned statement.

"We have mutually agreed this is the right time for him to step down given the demands on his time. I am grateful for his contributions to Yelp's success and wish him all the best going forward."

Yelp has not yet named a new chairman or director to replace Levchin. ®

Similar topics

Broader topics

Other stories you might like

  • GPL legal battle: Vizio told by judge it will have to answer breach-of-contract claims
    Fine-print crucially deemed contractual agreement as well as copyright license in smartTV source-code case

    The Software Freedom Conservancy (SFC) has won a significant legal victory in its ongoing effort to force Vizio to publish the source code of its SmartCast TV software, which is said to contain GPLv2 and LGPLv2.1 copyleft-licensed components.

    SFC sued Vizio, claiming it was in breach of contract by failing to obey the terms of the GPLv2 and LGPLv2.1 licenses that require source code to be made public when certain conditions are met, and sought declaratory relief on behalf of Vizio TV owners. SFC wanted its breach-of-contract arguments to be heard by the Orange County Superior Court in California, though Vizio kicked the matter up to the district court level in central California where it hoped to avoid the contract issue and defend its corner using just federal copyright law.

    On Friday, Federal District Judge Josephine Staton sided with SFC and granted its motion to send its lawsuit back to superior court. To do so, Judge Staton had to decide whether or not the federal Copyright Act preempted the SFC's breach-of-contract allegations; in the end, she decided it didn't.

    Continue reading
  • US brings first-of-its-kind criminal charges of Bitcoin-based sanctions-busting
    Citizen allegedly moved $10m-plus in BTC into banned nation

    US prosecutors have accused an American citizen of illegally funneling more than $10 million in Bitcoin into an economically sanctioned country.

    It's said the resulting criminal charges of sanctions busting through the use of cryptocurrency are the first of their kind to be brought in the US.

    Under the United States' International Emergency Economic Powers Act (IEEA), it is illegal for a citizen or institution within the US to transfer funds, directly or indirectly, to a sanctioned country, such as Iran, Cuba, North Korea, or Russia. If there is evidence the IEEA was willfully violated, a criminal case should follow. If an individual or financial exchange was unwittingly involved in evading sanctions, they may be subject to civil action. 

    Continue reading
  • Meta hires network chip guru from Intel: What does this mean for future silicon?
    Why be a customer when you can develop your own custom semiconductors

    Analysis Here's something that should raise eyebrows in the datacenter world: Facebook parent company Meta has hired a veteran networking chip engineer from Intel to lead silicon design efforts in the internet giant's infrastructure hardware engineering group.

    Jon Dama started as director of silicon in May for Meta's infrastructure hardware group, a role that has him "responsible for several design teams innovating the datacenter for scale," according to his LinkedIn profile. In a blurb, Dama indicated that a team is already in place at Meta, and he hopes to "scale the next several doublings of data processing" with them.

    Though we couldn't confirm it, we think it's likely that Dama is reporting to Alexis Bjorlin, Meta's vice president of infrastructure hardware who previously worked with Dama when she was general manager of Intel's Connectivity group before serving a two-year stint at Broadcom.

    Continue reading

Biting the hand that feeds IT © 1998–2022