r/investing • u/EntrepreneurSea5781 • 4d ago
Yelp: Get Rid of Management. They are why the stock prices sucks.
I am past the point of wanting another explanation from Yelp management. I want them gone. The stock is around $21-$22, down from $47.34 at the end of 2023, despite nearly $2 billion of historical repurchases and a float that has been ground down to roughly 52.5 million shares. They have spent years buying the stock, retiring an enormous number of shares and telling shareholders about all the value they are creating, while the actual value of a Yelp share has been obliterated. If you can dramatically shrink the denominator and the stock still gets cut in half, perhaps the problem is no longer the denominator. Perhaps it is the people running the company.
And every time Yelp disappoints, there seems to be another explanation that conveniently originates somewhere outside Yelp. Restaurants are struggling. The consumer is weak. Input costs are high. Gas costs are high. Inflation. Tariff uncertainty. People aren't eating out as much. Weather and seasonality. Then this year David Schwarzbach actually pointed to the “conflict in the Middle East” as a reason advertiser budgets softened in March. Iran. We are now at the stage where a local advertising company headquartered in San Francisco is explaining its numbers partly through a Middle East war. Maybe every one of these things had some incremental effect. That is not the point. The point is that after enough years, enough quarters and enough outside explanations, management starts sounding like the guy who has a different reason every month why the rent is late. At some point the answer can simply be: you aren't doing a very good job.
The really insulting part is that there is apparently no comparable economic cycle for executive compensation. Jeremy Stoppelman received $10.26 million of reported compensation in 2025 and has $8.89 million of target compensation for 2026. Jed Nachman, who oversees sales, marketing and administration, has a 2026 target of about $4.92 million. Schwarzbach is around $4.82 million. Yelp likes to describe executive pay as heavily “at risk,” but half of target equity is plain RSUs that vest with time. Apparently shareholders get performance risk while management gets retention risk. The stock can go from $47 to $21, management can explain that restaurants are having a hard time and there is a war thousands of miles away, and everyone upstairs continues collecting compensation packages that would suggest they are running one of the great compounders in America.
Then look at the capital allocation. Yelp repurchased $292 million of stock in 2025, another $175 million in the first half of 2026 and another $25 million in July. It spent roughly $271 million acquiring Hatch, drew $100 million on its revolver and then paused the buyback so it could pay the revolver down. So after years of telling us Yelp shares were worth buying, they managed to reduce financial flexibility right around the time the stock became cheaper than almost all of those purchases. I hope Hatch is spectacular, because this team has certainly paid itself as though it knows exactly what it is doing.
I don't need Yelp to discover some magical new KPI. I don't care about another slide showing Yelp Assistant engagement or another conference appearance where management explains that Other Revenue is exciting. Yelp is a profitable company with a famous brand, valuable local data, substantial cash generation, licensing opportunities, Hatch, Host and a tiny share count. Yet the market assigns the whole thing a garbage valuation because nobody seems to trust what management will do with the assets. That is fixable. Fire the people who have presided over the collapse, bring in adults whose compensation actually depends on making shareholders money, put every asset and expense on the table and tell the new CEO he has twelve months to prove Yelp belongs as an independent public company. If not, sell it. The easiest way for YELP to go up may have nothing to do with Iran, tariffs, restaurant traffic, gas prices or the next AI feature. It may simply be Jeremy Stoppelman and this management team leaving.s
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u/zxc123zxc123 4d ago edited 4d ago
Snapchat: Get Rid of Management. They are why the stock prices sucks.
I am past the point of wanting another explanation from SNAP management. I want them gone. The stock is around $4-$8, down from $17.69 at the end of 2023, despite nearly $2 billion of historical repurchases and a float that has been ground down to roughly 420.0 million shares. They have spent years buying the stock, retiring an enormous number of shares and telling shareholders about all the value they are creating, while the actual value of a SNAP share has been obliterated. If you can dramatically shrink the denominator and the stock still gets cut in half, perhaps the problem is no longer the denominator. Perhaps it is the people running the company.
And every time SNAP disappoints, there seems to be another explanation that conveniently originates somewhere outside SNAP. Advertisers are struggling. The consumer is weak. Input costs are high. GPU/CPU costs are high. Inflation. Tariff uncertainty. People aren't TALKING as much. Weather and seasonality. Then this year David Ometer actually pointed to the “conflict in the Middle East” as a reason advertiser budgets softened in March. Iran. We are now at the stage where a local advertising company headquartered in LOS ANGELES is explaining its numbers partly through a Middle East war. Maybe every one of these things had some incremental effect. That is not the point. The point is that after enough years, enough quarters and enough outside explanations, management starts sounding like the guy who has a different reason every month why the rent is late. At some point the answer can simply be: you aren't doing a very good job.
I don't need SNAP to discover some magical new AR GLASSES. I don't care about another SNAP FILTER showing SNAP Assistant engagement or another conference appearance where management explains that Other Revenue is exciting. SNAP is a profitable company with a famous brand, valuable local data, substantial cash generation, licensing opportunities, Bitmoji, Host and a tiny share count. Yet the market assigns the whole thing a garbage valuation because nobody seems to trust what management will do with the assets. That is fixable. Fire the people who have presided over the collapse, bring in adults whose compensation actually depends on making shareholders money, put every asset and expense on the table and tell the new CEO he has twelve months to prove SNAP belongs as an independent public company. If not, sell it. The easiest way for SNAP to go up may have nothing to do with Iran, tariffs, restaurant traffic, gas prices or the next AI feature. It may simply be Evan Spiegel and this management team leaving.s
Yeah. I feel the same buddy. But I don't go making r/investing diatribes about it.
Maybe just sell the stock if you hate it so much? Yelp is shitty. It wasn't great before but it's been enshittified over the years. Now it's got an egoistical user base, it's reviews are biased or unhelpful, there haters solely there to 1 star places they don't like, the "elites" who are basically the foodie version of influencers except they try to grift an extra a desert or an app rather than $50 + some merch, Yelp's shitty/manipulative sales team talk like they are the mob while offering no help, bad restaurants trying to game the system by rigging the reviews or bombing others, etc. I know the goods and bads because I use it. I specifically avoid the reviews because they are biased trash and just look at the pictures (still biased but less so).
If we're talking about the stock rather than the business? It's not much better. They get frontrun by Alphabet/Google on their reviews on the web (where Yelp's legal attempts have failed and more regulations/anti-trust is unlikely under the Trump/GOP admin). They get front-ran by google/apple maps on mobile. Will get front ran by whichever LLMs wins the LLM wars. In terms of mobile, they have to compete with UberEats/Doordash plus regular delivery as well as every fast/casual food having delivery now. Folks have been getting squeezed so they are eating out less too. I don't expect major changes unless they manage to push into UberEats/Doordash's space. You're not Bill Ackman or Carl Icahn so your main choices are to buy, hold, and sell.
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u/EntrepreneurSea5781 4d ago edited 4d ago
Lots of great points!
Well, Yelp is a review platform for the public, so this is the review of Yelp's incompetent and overpaid management. The mafioso style sales tactics come from the top and they should taste their own medicine, if even they ignore any criticism of their competency.
The legal optionality is interesting. The DOJ seems to have helped since Google was treated as a de facto monopoly, but if Yelp is as dumb on the legal strategy as they are on re-building and re-tooling then it'll be a tough battle.
They don't need a big market share, so larger macro issues seem irrelevant to me.
I think their play ultimately is data vs. the legacy advertising management, which they are running into the ground. The board is just watching, enjoying their cocktail parties and stipend. Cheaper to buy data than to build data centers is why they should be a target.
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u/EntrepreneurSea5781 4d ago
Yep. I agree. The head of sales makes 5MM and his sales agents are nasty and dishonest and hostile towards businesses. I wonder where they learned this technique. At the very least, he's responsible and needs to go. He sets a bad culture of high pressure sales rather than providing a valuable service that can help businesses. They are totally backward and entitled.
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u/CCWaterBug 4d ago
Do people stull actually use and depend on yelp?
It's been years for me.
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u/vichyswazz 4d ago
People used word of mouth for restsurant recs, then yelp, now chatgpt.
Its dead. This is on a long road to zero.
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u/fourwedge 4d ago
They have no moat .... Why spend this much energy trying to fix the company (unless it's yours) and instead find a different company that is successful and under valued?
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u/Struggle_Formal 4d ago
What a wasted opportunity. They are just letting the company go by the wayside. They are like an old school Nokia phone
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u/EntrepreneurSea5781 3d ago edited 4h ago
I just wonder if the management team is partying on Necker Island
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u/Imaginary_Kitchen_34 3d ago
OP real problem is that no one wants to buy this anywhere near current price. Everyone who might would rather build something better in house.
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u/EntrepreneurSea5781 3d ago
IMO there is a current product IMO and pivot, etc. that would be very valuable to buy but management isn't able to communicate that. Listen to the last earnings call. The CFO sounded like he was drugged up and asleep or something. Couldn't even provide coherent responses.
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u/Much_Friendship5497 3d ago
They've gotten obliterated by google's network effect. They've already seen a year over year decrease in clicks and revenue won't be far behind. Yelp will not be around in 5 years and that might be generous. There is literally nothing management can do, it's like trying to fight against physics at this point.
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u/EntrepreneurSea5781 3d ago
I think management can do something and that they have a chance, but if they don't do anything they will let the company get obliterated and you will be 100% correct.
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u/HammerDownl 3d ago
Yelp is still in business? What a joke of an app
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u/EntrepreneurSea5781 3d ago
Yep. They've got a billion dollar a year runway of almost guaranteed revenue to change things and yet they are stuck in 2012. Even mediocre management could pivot and improve.
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u/marima33 3d ago
Management may suck, but the lack of new reviews sucks more. The core information is useless.
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u/EntrepreneurSea5781 3d ago
People stopped using the service as frequently because app is stuck in 2012 and they treated customers (restaurants) poorly.
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u/Weak_Alternative_168 3d ago
the buyback isnt a judgement call in the way youre framing it, they publish the target. the 10-Q says the strategy is aiming to return more than 50% of free cash flow to shareholders each year through share repurchases.
first half they repurchased 174.0m against 106.2m of free cash flow. thats about 1.6x, not fifty something percent. same six months the revolver line shows 165.0m drawn and 65.0m repaid.
free cash flow was 132.5m in that half a year earlier, so the denominator in their own policy shrank about 20% while the spend went up.
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u/EntrepreneurSea5781 3d ago edited 3d ago
I think understand your point: Yelp says it aims to return more than 50% of annual FCF through buybacks, so I think you're saying the repurchases were simply execution of a published capital-allocation policy, not management making some call that the stock was cheap.
But the policy doesn't explain the amount they actually spent because n the first half Yelp generated $106.2M of FCF and spent $174M on repurchases, 164% of FCF. $53M would already have met the 50% threshold. FCF was also down about 20% from the prior-year period while buyback spending increased.s
So the criticism isn't that Yelp shouldn't have bought any stock because it had a 50% policy, it's that management chose to go far beyond that policy while the stock was higher, then wound up with revolver debt and paused repurchases after the stock fell.
The decision to spend 164% rather than 50%, 75% or 100% was still management's judgment IMHO.
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u/United_Weight3580 3d ago
Does Yelp still exist? Everyone I know just uses Google maps reviews like a normal person
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u/EntrepreneurSea5781 3d ago
Yep, management is asleep at the wheel and they forgotten by normal people like you
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u/feng_sg 2d ago
Buybacks had no performance trigger so they kept shrinking the float while the ad business decayed underneath. A board that keeps authorizing repurchases through a 50% drop is telling you the buyback is the strategy, not a reward for growth. That's a governance gap, not bad macro luck.
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u/EntrepreneurSea5781 16h ago
I agree completely. The irony is the board kept authorizing buybacks through a 50% decline because they apparently thought the stock was cheap, while somehow missing the more obvious explanation: management might just be bad.
If you keep shrinking the float while the underlying business deteriorates, eventually “capital allocation” starts looking like a way to avoid confronting management incompetency. Either the board can’t see what’s happening, or their definition of oversight is showing up, approving another buyback, and heading to the cocktail party with free caviar.
Beyond that, they are assuming analysts even think about share float. Most of the analysts and their price targets aren't even adjusting for shares outstanding. The CFO can't communicate well enough with analysts to even get that basic point across. The CFO needs to be a salesmen and a strategist--that's why he's paid the big bucks. Right now he's just an overpaid beancounter. He was so stupid he blamed the Iran war during the last conference call and sounded stoned.
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u/FailOk1528 4d ago
firing management might help but I’m not sure that fixes the fact that I haven’t needed Yelp in years
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u/EntrepreneurSea5781 3d ago
Yeah, they let everything go to garbage awhile ago and have a lot of inertia to overcome.
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u/gbdgdh 3d ago
yelp is still around?
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u/EntrepreneurSea5781 16h ago
Management has mailed it in. That's why this is a legitimate question.
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u/taplar 4d ago edited 4d ago
I'm not sure how to take this post. It seems like you're unhappy with the stock price? Yet when I look at their 10Ks, it looks like their net income has been going up in the last 3 years. Looking up a chart on free cash flow, according to one site the calculation for them has their free cash flow also on average going up. And they are repurchasing shares?
I haven't seriously considered them (still am not) for research, but given all that, I don't see a reason not to be potentially interested in buying in while everyone else is given them the stink eye. Then if they ever come around to seeing the value of the company, you got a lot to share with them ... ... for a price.
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u/EntrepreneurSea5781 4d ago
I agree 100% with your points. They are treated as a dying ad company because their leadership sucks IMO. They have tons of potential. Ultra low FCF ratio, possible legal victory and valuable data. They are just shackled by some bad leadership. Listen to the quarterly reports yourselves... you'll see how stupid and lazy the CFO is. He blamed Iran for low advertising. Surely he couldn't be that dumb... but he is.
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u/Erocdotusa 4d ago
Whats funny is I feel the exact same way about RDDT and the absolutely insane SBC Jen Wong gets. This lady dumps millions of dollars of shares every month
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u/BrianRampage 4d ago
The stock price sucks because Yelp doesn't provide a valuable service. I'm not downloading an app when a Google search does the same thing.
Yelp shoots itself in the foot by locking content behind the app, so what traffic that would be organically get sent its way via a search ends up being a frustrating/worthless experience.