Why Yelp Shares Soared

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of social reviewer Yelp (NYS: YELP) soared this morning by 15% after the company announced an acquisition and preliminary earnings. The company has since given up some of those gains.

So what: Revenue should be about $36.4 million, with adjusted EBITDA of $2.2 million. Both figures top the guidance that the company previously provided in August. Yelp's net loss for the quarter should be $2 million. Full financial results will be released on Nov. 1, at which time the company will also provide additional forward-looking guidance.

Now what: Yelp also announced that it has acquired Qype, the largest local-review site in Europe, to help spur the company's international expansion. Qype currently has about 2 million reviews on its site and sees 15 million unique visitors monthly across 13 different countries. The total purchase price was roughly $50 million and was comprised of cash and 970,000 shares of stock.

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The article Why Yelp Shares Soared originally appeared on Fool.com.

Evan Niu, CFA, has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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