Yelp Files For $100 Million IPO • Hacker News Board

Re: Yelp Files For $100 Million IPO

#61

Post by joez » Fri, Nov 18, 2011, 9:11 AM UTC

rationalbeats wrote: post #8

So I glanced through the S-1 real quick. They want to raise $100 million, and so far this year their revenue is about $55 million? Those numbers seem off to me. Also they are only pulling in 50 odd million a year? Seems really low. Did anyone else have to put in a CAPTCHA in the S-1 to read the potential negatives???

What seems off about the numbers?

I think the IPO is more about an exit for founders/investors than the actual 100 million amount. That's just the float that they're putting out (not a valuation). 100 million is a credible number they can say they need this amount to grow/reach breakeven.

Re: Yelp Files For $100 Million IPO

#62

Post by majani » Fri, Nov 18, 2011, 9:26 AM UTC

pbreit wrote: post #35

pg_bot wrote: post #27

Why are all these recent tech companies that have gone through an IPO not able to turn a profit? Groupon, Pandora, LinkedIn, and now Yelp are all valued so highly yet they are not making money off of their services. If you have been in business for over 5 years and don't make a profit when are you expecting to?

It makes no sense to shoot for profitability when you are growing rapidly. Yelp has only just started expanding outside the US. It's cash is much better spent on growth than sitting in the bank.

Tons of high-growth companies have been profitable from early on(e.g Microsoft). Google and Amazon were exceptions.

Re: Yelp Files For $100 Million IPO

#63

Post by pbreit » Sat, Nov 19, 2011, 5:58 PM UTC

pg_bot wrote: post #47

pbreit wrote: post #35

Earlier quoted context omitted.

It makes no sense to shoot for profitability when you are growing rapidly. Yelp has only just started expanding outside the US. It's cash is much better spent on growth than sitting in the bank.

How do you know that your rapid growth isn't a result of your service being unprofitable? Wasn't that the lesson that we were supposed to learn with pets.com and kozmo? Also I believe that profitability and rapid growth are not mutually exclusive. I understand the theory of operating at a loss, but it leaves very little room for uncertainty in the marketplace. If you have new competition, capital dries up, or you mak…

Pulling out 12 year old anecdotes is not a terrific defense. Yes, there is risk involved. But few companies have gotten huge without taking on that kind of risk. You are welcome not to invest but might want to step aside to avoid the stampede.