(Reuters) - Hedge fund SQN Investors LP, one of Yelp Inc's YELP.N top five shareholders, on Monday called for an overhaul of the local search and customer review company's board and the appointment of new independent directors, blaming it for underperformance.
SQN, which owns more than 4 percent stake in Yelp, said in a letter to the board that it has failed to hold itself and the management accountable for the company’s “repeated strategic and operational missteps.”
Last month, Yelp missed third-quarter revenue estimates and cut 2018 revenue forecast, hurt by lower-than-expected advertising sales. Shares of the San Francisco-based company have fallen about 18 percent this year.
“We are deeply concerned by the board’s lack of urgency in addressing many of the issues facing Yelp,” the hedge fund said, adding that a “refreshed” board will help determine if Yelp should consider selling itself.
In the past several quarters, Yelp has struggled to grow, with revenue expansion going below 2 percent. The hedge fund said the company's slow pace of innovation has helped the big names such as Google and Facebook Inc FB.O to narrow the gap by collecting significant reviews.
In a response to SQN’s letter, Yelp said it is looking forward to a dialogue with the hedge fund.
Yelp’s website helps users rate and review local businesses and also book online reservations for events and restaurants.
Reporting by Sonam Rai in Bengaluru; Editing by Derek Francis and Arun Koyyur
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