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Why SQN Investors Is Frustrated with Yelp

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Yelp has lost some growth opportunities

Today, SQN Investors, one of Yelp’s (YELP) top five stockholders, publically published a letter criticizing Yelp’s board and management. SQN stated that Yelp’s business model has great potential but the company hasn’t been managed properly for many years. The letter explained, “In our view, the Board has failed to hold itself and Management accountable for the Company’s strategic and operational missteps, repeated missed earnings, lost opportunities, and poor corporate governance.”

Yelp has struggled over the past few years. The stock fell 30% in a single trading day last month when the company announced its third-quarter results. Yelp also offered a weaker outlook for the fourth quarter.

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In general, Yelp’s competitors have taken business opportunities away from the company. Google (GOOG) has improved its restaurant search feature, and people have started using Instagram (FB) to upload pictures of where they’re eating while providing useful reviews. Yelp’s stock has declined 15% in the last year.

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