Yelp in ‘Death Spiral’ after earnings report, Chairman steps down
On March 4, 2014, Yelp shares closed at $98.04 a share.
On Wednesday, the stock was trading at $24.
This 75% collapse has come quickly and furiously.
Just over a year ago, Goldman said its clients were asking when the “party was going to end” as shares of companies like Yelp and Facebook exploded higher during the first half of 2014.
For Facebook, the party hasn’t stopped. For Yelp, the party is definitely over.
In an email on Wednesday, Eric Jackson, a prominent tech investor, said that Yelp looks like it’s currently in a “death spiral” and that it’s hard to see how the company can pull itself out from here.
On Tuesday night, Yelp reported earnings that were a disappointment, but what really seems to be spooking investors, at least in Jackson’s view, is the resignation of Yelp chairman Max Levchin from the company’s board.