The popular review giant Yelp is reportedly exploring a sale, according to The Wall Street Journal, which cited people familiar with the plan. With a $2.9 billion market value, the company could expect to get over $3.5 billion, the newspaper reported.
“The San Francisco-based company is working with investment bankers and has been in touch with potential buyers in recent weeks,” the newspaper said.
Yelp launched its initial public offering in 2012, pricing it above expectations, the article noted. Since then, its stock price has fallen from highs set in March 2014, when its share price was trading at around $97. “On Thursday, before The Wall Street Journal’s report, Yelp’s shares were trading around $39. After the news, shares were trading around $41, up about 8%,” the Journal added.
In its latest financial report, Yelp (YELP) said it saw 143 million unique visitors during the first quarter. Traffic also grew, rising 8%, although growth has slowed. The newspaper reported that last year Yelp’s growth was up 30% in the first quarter. The Journal added:
Even as it struggles with growth, Yelp could be attractive to a wide range of buyers beyond online review rivals. A deep base of reviews can be a valuable asset because they take time to amass. Reviews are magnets for smartphone users, valuable for companies seeking mobile growth. Also, a website with a loyal following entices more users to visit the site directly, allowing its owner to avoid paying for search engine advertising.
But the article also cautioned that although Yelp is looking into a sale, one won’t necessarily take place.
In January, Fortune profiled Yelp’s head of small business. You can read that profile here.