- Activist investor TCS Capital Management demanded Yelp's board act to increase share price.
- TCS President Eric Semler called for Yelp to explore strategic options, possibly a sale.
- Semler also suggested a merger with Angi would benefit Yelp.
Yelp (YELP) shares jumped over 5% on Monday after activist investor TCS Capital Management blasted the business review website company and called for the board to take action, including possibly a sale.
In a letter to Chair Diane Irvine and the board, TCS President Eric Semler said the firm wanted to “express our serious concern and disappointment with the abysmal performance of Yelp’s stock price and to demand that the Board immediately explore strategic alternatives.”
Semler added that TCS felt that Yelp is “shockingly undervalued” and could get $70 per share, more than double Monday’s closing price, from either a strategic or private equity buyer.
Yelp shares are up over 23% year-to-date, but are well off their all-time highs set nine years ago.
The letter also recommended Yelp consider a tax-free merger with home projects services provider ANGI (ANGI), formerly Angie’s List, which Semler argued would create “a powerhouse in the $500 million home services market.” Angi shares took off close to 8% on the news on Tuesday.
Semler noted that TCS owns 4% of Yelp’s outstanding shares, making it one of the five biggest shareholders of the company.
Yelp did not immediately comment on the letter.