Yelp’s stock opened to five-star reviews from investors Friday, soaring 64 percent even though the company has yet to prove it can make money from its online recommendations.
After Yelp’s initial public offering priced at $15, the shares gained $9.52 to close at $24.52 in their trading debut. In an indication of the investor interest in the 8-year-old reviews site, the IPO sold above its targeted range of $12 to $14 a share.
It’s the biggest first-day gain for an Internet IPO since online real estate service Zillow Inc. surged 79 percent in its stock market debut in July. Yelp’s gain wasn’t the biggest for an IPO so far this year, though. Those bragging rights belong to Proto Labs Inc., a provider of customized parts. Proto Labs’ shares soared 81 percent in their first day of trading a week ago.
Yelp’s IPO is the latest in a series of Internet stock offerings that are serving as a prelude to Facebook’s coming-out party on Wall Street this spring.
After expenses, Yelp Inc. estimates it will get about $96 million from its IPO. The company sold 7.1 million shares. Investment bankers also have an option sell an additional 1.07 million shares, depending on investor demand. If those shares are sold, Yelp expects net proceeds of $111.2 million.
