Yelp Inc (YELP.N) shares rose 10% in premarket trade Tuesday after activist investor TCS Capital Management advised the service-recommendation site to sell or merge with online services business Angi Inc (ANGI.O).
TCS Capital, a top Yelp stakeholder with over 4%, called the firm “shockingly undervalued.”
“As a former board member and longtime investor in ANGI, I believe that a Yelp and ANGI combination would yield enormous revenue synergies and cost savings that could ultimately double the value of Yelp’s shares,” TCS Capital founder Eric Semler wrote in a letter.
Semler advised selling Yelp for at least $70 per share, more than quadruple its current price.
Yelp shares rose to $36.03 premarket on Tuesday.
A Yelp representative said the company “maintains an active dialogue with our shareholders and values constructive feedback on our business and ways to create value.”
