Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Yelp Inc. Stock Plunged Today

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 Yelp (NYSE: YELP  ) dropped by as much as 10% Tuesday amid a broader pullback in the tech sector.

So what: With no big company-specific news today, it's worth noting Yelp had already risen nearly 35% since early May. It's unsurprising, then, that the local business search specialist fell harder than most as the tech-heavy NASDAQ Composite Index simultaneously dropped by nearly 1.8% during Tuesday's intraday trading. 

Now what: For perspective, Yelp's recent lows came after a shareholder rights firm launched an investigation into whether it had violated federal securities laws with potentially misleading statements involving the accuracy of its reviews, Yelp's processes in screening potentially unreliable reviews, and "certain undisclosed business practices" surrounding the suppression of such reviews. Nonetheless, investors took advantage of the pullback to buy shares, especially after evidence surfaced that Yelp was continuing to grab more market share in the multibillion-dollar mobile search market -- and despite well-funded, big-name competition in the space.

That's not to say Yelp looks cheap; shares currently trade around 220 times next year's expected earnings and nearly 21 times trailing 12-month sales. But if Yelp can continue its impressive growth as it shuffles for a larger slice of its burgeoning target market, the stock could certainly continue rewarding investors from here.

Leaked: Apple's next smart device (warning, it may shock you)
But Yelp also isn't the only way to play disruptive mobile technology. In fact, Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But another small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Read/Post Comments (1) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3021755, ~/Articles/ArticleHandler.aspx, 8/28/2015 3:22:50 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Steve Symington

Technology and consumer goods specialist for the Fool. Steve looks for responsible businesses which positively shape our lives. Then, he invests accordingly. Enjoy his work? Connect with him on Twitter & Facebook so you don't miss a thing.

Today's Market

updated Moments ago Sponsored by:
DOW 16,609.80 -44.97 -0.27%
S&P 500 1,983.28 -4.38 -0.22%
NASD 4,816.49 3.78 0.08%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 3:06 PM
YELP $23.95 Down -0.03 -0.13%
Yelp CAPS Rating: **
AAPL $112.61 Down -0.31 -0.27%
Apple CAPS Rating: ****