Eminence Capital, which is owned by Ricky Sandler, plans to purchase up to a 20 percent stake in Yelp and has filed a form 13G with the U.S. Securities and Exchange Commission, Octafinance reported.
The hedge fund was founded by Sandler in 1998 and oversees some $3 billion in investments.
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San Francisco-based Yelp, which operates in 61 domestic and 66 international markets, enables crowd-sourced reviews of local businesses and also provides a forum for consumers.
The firm was founded by former PayPal executive Jeremy Stoppelman in 2004 and went public in 2012. It claims to have generated 77 million reviews of restaurants and service providers ranging from plumbers to dentists. Diners often turn to Yelp for restaurant recommendations before heading out.
Other Yelp investors include Eashwar Krishnan, Tybourne Capital Management with 3581228 shares, Dragoneer Investment Group with 732595 shares, F4 J&P China Capital Management Company holds 1974513 shares, Apex Capital has 1062600 shares, and Glynn Capital Management says 6.43 percent of its portfolio is now in Yelp shares, according to Octafinance.
Yelp, which is free to consumers, depends on advertising to pull in the bulk of its revenue. The company’s stock lost over half its value in eight months, the Associated Press reported. The firm, which has some 3, 000 employees, is believed to be worth about $3 billion.
Google sought to buy Yelp five years ago, but at the time Stoppelman wasn’t interested. Now Yelp sees changes in Google’s algorithm as part of the reason for an overall downturn in the growth of non-U.S. visitors to its site, according to The Wall Street Journal.
The company reported some 142 million unique visitors in the first quarter of 2015, the Journal reported.
Yelp was selling at $45.55 Tuesday, down 2 percent on the New York Stock Exchange.