Reuters: Global Markets: Yelp soars in biggest one-day gain as lockup ends

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Yelp soars in biggest one-day gain as lockup ends Aug 29th 2012, 16:54 By Ryan Vlastelica and David Gaffen NEW YORK | Wed Aug 29, 2012 12:54pm EDT NEW YORK (Reuters) - Shares of consumer reviews website Yelp Inc (YELP.N) recorded their biggest one-day advance on Wednesday, the day insiders were free to sell their holdings, surprising investors. The stock rose 18.7 percent to $21.68 with more than six million shares traded, putting Yelp on track for its busiest day since its debut in March. Shares rose as high as $22.89, and the rally bumped the stock back above its debut price of $22.01 a share. Part of the stock's rise may be related to the relatively high percentage of shares being borrowed for shorting purposes. About 97 percent of the shares available for borrowing for short bets were borrowed. This only amounts to about 4 percent of the total shares outstanding, according to Data Explorers, a Markit company. "I haven't seen a good old-fashioned tech short-squeeze in a long time, but this has all the behavior of that," said Mike Shea, managing partner and trader at Direct Access Partners LLC in New York. About 53 million shares were eligible for sale at the end of the lockup period. Similar ends to restrictions on selling by insiders and underwriters have pressured other technology companies. Facebook Inc (FB.O) was hit hard after its initial lockup period ended two weeks ago. "People felt it would be a lock - pun intended - that you'd see the stock get hit when the lockup ended, and that clearly didn't happen," Shea said. "So now everyone is running for cover." With the stock shooting higher, shorts may have been forced to cover their bets to avoid the short squeeze that costs them more money, and apparently added to a sharp upward movement in a stock's price. (Editing by Jeffrey Benkoe) Link this Share this Digg this Email Reprints

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