Tech and grub, two of our favorite things. We’re talking review site Yelp, which is seeing its shares dive today. They’re down about 7.5 percent to $29.20 as of this post.
Why the big dip? Investors could be spooked by what’s been called a combo-platter deal between Chicago-based GrubHub and New York-based Seamless, two startups that let people order takeout food online, which was announced this week. According to the Wall Street Journal, the companies say they process more than 90,000 orders a day combined. And they cover about 32,000 restaurants in the U.S. and U.K., according to Bloomberg Businessweek, which points to what could affect San Francisco-based Yelp the most: The GrubHub-Seamless merger means people can get reviews, recommendations and ravioli. (Or whatever kind of food they want to order.) It’s that final step — the piece de resistance — Yelp is missing so far.
In other news about Yelp, it was back in court this week over what it has called a “conspiracy theory.” Lawsuits claiming that Yelp “extorted” advertising from businesses in exchange for favorable reviews were dismissed in 2011. But a law firm/advertiser with the site took Yelp to court last month, and the case was reportedly sent Tuesday to a higher court for appeal.
Yelp went public last year, its shares getting rave reviews on its first day of trading. The shares, which started trading at $15, reached a closing high of more than $32 earlier this month, when the company reported a better-than-expected 68 percent jump in first-quarter sales.
Photo from Bloomberg News archives