According to the law firm press release, Yelp operates as an online local guide that connects people primarily with boutiques, mechanics, restaurants, and dentists. The company's local advertising services include a free online business account that enables businesses to view business trends, use the revenue estimator tool, message customers, update information, and offer Yelp deals and gift certificates.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements concerning the Company's true business and financial condition, including but not limited to the true nature of the so-called "firsthand" experiences and reviews appearing on the Company's website, the robustness of its processes and algorithms purportedly designed to screen unreliable reviews, and the Company's forecasted financial growth prospects and the extent to which they were reliant upon undisclosed business practices, including but not limited to requiring business customers to pay to suppress negative reviews.
The misrepresentations made by Defendants concerning the Company's current financial and business condition, including its forecasted financial and business condition alleged herein, were each materially false and misleading when made and caused the Company's stock to trade at artificially inflated prices of over $98.00 per share on March 4, 2014.
According to the complaint, as the true facts concerning the Company's business practices began to be revealed to the market through a series of articles and disclosures starting on March 31, 2014, the Company's stock price declined, falling from a close of $80.18 per share on April 1, 2014 to a close of $65.76 per share on April 4, 2014.
On April 21, 2015, the Court dismissed the Consolidated Complaint. Plaintiffs were given leave to replead.
On November 24, 2015, the Court issued an Order dismissing Plaintiffs' amended complaint. This dismissal was with prejudice.