Yelp Inc. tumbled the most since its initial public offering after active users declined at the online- reviewing service last quarter amid greater competition from the likes of Google Inc.
The stock slumped as much as 22 percent to $44.86, the biggest intraday decline since Yelp’s IPO in March 2012. While the shares had risen almost fourfold since their debut, the competition for local Web advertising has intensified.
Yelp, which provides local user reviews of everything from restaurants to hairdressers, is at risk from a growth slowdown as people use desktop PCs less and Google escalates competition, according to Darren Aftahi, an analyst at Northland Securities. He cut his rating on the shares to hold.
Monthly active users at San Francisco-based Yelp fell to 135 million in the fourth quarter from 139 million in the third quarter, the first-ever sequential decline, according to Bloomberg Intelligence.
Google has also implemented algorithm changes, resulting in fewer visits to Yelp from search engines, Yelp Chief Executive Officer Jeremy Stoppelman said Thursday on a conference call.
This article was written by James Callan from Bloomberg and was legally licensed through the NewsCred publisher network.