- TCS Capital Management, an activist investor, has acquired a significant ownership position in Yelp and is urging the service-recommendation platform to consider various strategic options, such as a potential sale. TCS Capital currently holds over 4% of Yelp's outstanding common stock, placing it among the company's top five shareholders. Although TCS Capital has been invested in Yelp for the majority of the past five years, this particular stake has not been publicly disclosed until now.
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According to a letter obtained by The Wall Street Journal, Eric Semler, the founder and president of TCS Capital, suggests that Yelp could potentially be acquired by another technology or media company, or a private-equity buyer, for a minimum of $70 per share. This estimate is more than double the current stock price. As of Monday's closing, Yelp's shares were valued at $32.52, reflecting a 17% decline from its 52-week high of $39.26.
Why it matters
In the letter, Semler intends to propose that Yelp considers the possibility of merging with Angi, an online-services company previously known as Angie's List, without incurring any taxes. Semler, the founder of TCS Capital established in 2001, obtained a seat on Angie's List board in 2016 following his firm's suggestion for the business-review platform to explore various strategic options, such as a sale to HomeAdvisor, a consumer-review site owned by IAC. Although IAC had made an unsolicited acquisition offer for Angie's List in 2015, the proposal was declined.
