Yelp, an American multinational company that handles user restaurant reviews and ratings seems to be in quite a pickle. On Tuesday, its shares fell over 15%, after the company reduced its year end earning outlook.
While revenue in the company grew by 51%, the quarterly net revenue was predicted to be a maximum of $142 million, missing the analyst expectation by ten million at $152 million.
More Bad News
Aside from the devaluation of stocks, Max Levchin, the chairman of the Yelp board resigned. While he said it was to focus on his new company, Affirm, the timing could not have been worse.
Worse and Worse
Yelp is also involved in some nasty lawsuits. For one, it is fighting against tech giant, Google that tried to acquire it for $500 million in 2009. Additionally, it is involved in a lawsuit filed by drivers from food-delivery service Eat24, which was purchased by Yelp in February, in which the drivers are claiming that they didn’t receive tips due to them. However, Yelp maintains that it didn’t own Eat24 at the time of the aggravation, and should therefore not be held responsible.
More bizarrely, the Yelp portal, which curates dentist profiles as well as bakery and restaurant profiles is being bombarded with negative comments regarding Walter Palmer, a dentist who has come under fire for killing Cecil, a wild lion in Zimbabwe.
A Silver Lining?
Despite these issues, Jeremy Stoppelman the CEO of Yelp remains positive. “While this year has not gone as smoothly as we anticipated, I’m confident as ever about our future, particularly about the success of our apps and mobile advertising products. With the strength in our core business we continue to believe that we can be a $1 billion revenue company by the end of 2017,” he said in an analyst call.
We can only hope that his optimism pans out.