Yelp Can’t Shake Shareholder Stock Drop Suit Over ‘Churn Rate’

Yelp Inc. failed to put an end to a shareholder suit alleging it artificially inflated its stock by misrepresenting expected revenues, after the Northern District of California found a disputed fact question over whether the company made misleading material omissions.

The complaint alleges Yelp failed to disclose that it was experiencing a problematic “churn rate"—turnover of its local advertisers—which was causing its 2017 revenues to drop. When the issue was disclosed it caused Yelp’s stock price to fall, the plaintiffs say.

The existence of a pair of statements the company made in February 2017, characterizing its “high churn rate” as ...