Yelp Shareholders Pan Local Ad Figures in Suit

Jan. 19, 2018, 10:16 PM

Yelp Inc. faces a class action by shareholders who say the company issued misleading statements about its local advertising revenue.

Company executives allegedly misled shareholders about advertising revenue from local businesses, according to a complaint filed Jan. 18 in the U.S. District Court for the Northern District of California.

Yelp told shareholders its local advertising revenue was increasing, despite knowing the company was switching to a less lucrative ad pricing model and experiencing advertiser churn, according to the complaint. The drop in local advertising revenue affected Yelp’s 2017 financial performance, leading to a drop in stock price, the complaint said.

A Yelp spokesperson said, “We deny the allegations and intend to vigorously contest them.”

The case is Azar v. Yelp Inc., N.D. Cal., No. 3:18-cv-00400, complaint filed 1/18/18.

To contact the reporter on this story: Jennifer Bennett in Washington at jbennett@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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