© Reuters. FILE PHOTO: The company logo for Yelp! is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., February 17, 2017. REUTERS/Brendan McDermid
(Reuters) – Activist investor TCS Capital Management on Tuesday urged Yelp (NYSE:) Inc to either explore a sale or a merger with online-services company Angi Inc, sending shares of the service-recommendation site 10% higher in premarket trading.
TCS Capital, which is one of Yelp’s top shareholders with a stake of more than 4%, said the company was “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,” said Eric Semler, TCS Capital’s founder wrote in a letter.
Alternatively, Semler suggested that Yelp could be sold for at least $70 per share, or more than double the current stock price.
Shares of Yelp were up at $36.03 in premarket trading on Tuesday.
A Yelp spokesperson said the company “maintains an active dialogue with our shareholders and values constructive feedback on our business and ways to create value.”
Angi did not immediately respond to a request for comment.
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