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Yelp's shares dip after documentary accuses company of extortion
March 19, 2015 / 6:35 PM / 3 years ago

Yelp's shares dip after documentary accuses company of extortion

March 19 (Reuters) - Shares of Yelp Inc fell more than 4.5 percent on Thursday after the trailer of a documentary posted on fund-raising website Kickstarter alleged that the consumer review website operator was extorting money from small businesses.

The film, titled “Billion Dollar Bully”, alleges that Yelp extorted money from restaurants and filtered out favorable customer reviews if business owners didn’t pay to advertise on the site.

"Every one of the clients had been threatened with harm if they didn't pay money," attorney Lawrence Murray says in the documentary's trailer. (kck.st/18LBoUf)

A Yelp spokeswoman said the claims had no merit and that the film’s director, Kaylie Milliken, had a history of trying to mislead consumers on Yelp.

“The claims ... have been repeatedly dismissed by courts of law, investigated by government regulators, including the FTC, and disproven by academic study,” the spokeswoman said in an email.

Milliken who is based in San Francisco, told Reuters that the completed documentary would contain evidence supporting the allegations.

The producers are seeking to raise $60,000 through Kickstarter to complete production.

Analysts at Barclays and Cowen and Co were unfazed by the trailer, saying the company had successfully defended itself against similar accusations in the past.

The company has been stepping up efforts to expand internationally as growth in the United States matures, but has had little success so far.

Options volume on Yelp was at 33,000 contracts, or six times normal, by 1:40 p.m. ET on Thursday, according to options analytics firm Trade Alert data. Up to Wednesday’s close, the stock had fallen about 47 pct in the past 12 months. (Additional reporting by Lehar Maan in Bengaluru; Editing by Simon Jennings)

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