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Groupon, whose weakened shares have made it the target of an activist investor who wanted the company to consider a sale or a massive buyout of shares, is considering a possible deal with Yelp, according to the Wall Street Journal.
Groupon shares have risen 21% since Robert Chapman announced on August 29 that he had bought a 1.5% stake in the company and wanted a buyout or a large sale. Despite the recent increase, the stock is still trading at $ 3.01 per share. Chapman said he was considering leaving his position in the Chicago-based online distribution company, after a phone call with Groupon chief executive officer Rich Williams last week, leaving him unconvinced that the society would be receptive to his ideas.
Groupon has often been the subject of business discussions, most recently as a salesman. And the idea of a Groupon-Yelp wedding has already been presented. This time, the Journal suggests that Groupon might want to buy.
Yelp, an online site that allows consumers to search and evaluate local merchants such as restaurants, is a marketing platform for small businesses, much like Groupon. Both companies have attracted attention for creating new online business models. But they had trouble.
Groupon is the largest of the two companies in terms of revenue, but Yelp is more profitable. Stock market value is also higher at $ 2.5 billion, compared to $ 1.4 billion for Groupon.
Groupon went public at $ 20 a share almost eight years ago. Revenues have increased 64% since 2011 to reach $ 2.6 billion last year. The company made a profit of $ 2 million, compared to a loss of $ 298 million in 2011.
Yelp went public at $ 15 per share in 2012. The stock closed at $ 34.60 on Wednesday, well below its peak of nearly $ 100 per share in 2014. Revenues have increased 1,000% since 2011 to reach $ 942.7 million last year. It generated $ 53.5 million in 2018, compared to a loss of $ 16.7 million in 2011.
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