Consumer review website Yelp Inc. saw shares soar Friday morning, opening at 60 percent above their IPO price as investors scrambled to get a piece of the fast-growing local advertising market. On Thursday, the company had priced the shares at $15 each, but the shares were trading at $24.50 as of noon ET. At that price, the company is carrying a market cap of $1.43 billion, or about 17 times its 2011 revenue.
With more than 25 million reviews on its website, Yelp is a place for consumers to read and post online reviews of local businesses and service providers. The site has reviews and recommendations for just about any type of company, from plumbers, to electricians, to restaurants to entertainment venues. The company was founded 8 years ago by former PayPal engineers Jeremy Stoppelman and Russel Simmons after Stoppelman conducted an online search for doctors. When his search resulted in nothing but generic lists of doctors posted by insurance companies, Stoppelman came up with the idea for Yelp.