Stock Market Predictions

Italy's Seat shares jump with debt deal in sight

Stock Market Predictions

Turin-based Seat said it had won support for its debt restructuring proposal from committees representing 30 percent of its senior bondholders and more than 50 percent of its junior bondholders.

Seat's private equity shareholders, including CVC, also endorsed the deal.

"It's good news. If we understand well there are only a few technical points to be solved and then a positive conclusion to this never-ending saga will be achieved," Mediobanca analyst Marco Greco said in a note.

But he added that "as the devil is in the details, it is too early to assume that the bankruptcy risk is totally over."

By 0916 GMT, the stock was up 18.6 percent at 0.0492 euros in volatile trade. Its market value has fallen about 99 percent from its peak in 2007.

Seat has defaulted twice on its debt obligations in the last few months and postponed several times the deadline to reach a final agreement. The latest deadline is March 7.

A majority of at least 75 percent is needed from each of its three creditor categories - bank lenders, senior and junior bondholders - for the proposal to go through, Seat has said.

"On paper it looks like an agreement is within reach. The only hurdle to solve is (full approval from) bank lenders," a source familiar with the situation said.

Seat has about 70 Italian and foreign bank lenders, including Britain's Royal Bank of Scotland (RBS.L).

The deal foresees the conversion of a 1.2 billion euro portion of junior debt into equity.

A failure to reach agreement on restructuring would see Seat fall into special administration under Italy's so-called Marzano law which gives protection from creditors.

Seat was bought in 2003 by private equity firms in a 5.7-billion euro leveraged buyout. CVC, Permira and Investitori Associati now hold about 49.5 percent of Seat.

($1 = 0.7501 euros)

(Reporting by Danilo Masoni; Editing by Mark Potter)

Disney disputes shareholder report on CEO pay, role

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Disney, in filings with securities regulators, said a report by Institutional Shareholder Services was "deeply flawed and out of touch with shareholder interests."

The entertainment and theme-park company said in October that Iger would remain CEO through March 2015 and take on the additional role of chairman at the company's annual meeting this month.

ISS, in its report, said Disney had "reversed an earlier commitment to independent board leadership without transparency or shareholder input." The group said the company's move was "an about-face" from reforms adopted after some shareholders objected in 2004 to former CEO Michael Eisner also holding the chairman's job.

Disney said it made no such commitment. "The board specifically limited its commitment to a post-decision explanation", Disney said on Thursday, adding it had also promised to name a lead independent director.

The company said the idea of extending Iger's term and having him serve as chairman was "initiated by the board and not by Mr. Iger." The board acted to "secure Mr. Iger's leadership through his expected retirement in 2016 to provide for an effective, seamless succession," the company said.

On pay, ISS urged shareholders to oppose Iger's compensation in a non-binding vote.

ISS said Iger's pay "has risen sharply over the past five years despite lackluster shareholder returns" and ranked "among the highest in the S&P 500."

Disney countered that the company had delivered "exceptional total shareholder return" during Iger's six years in the company's top job starting in October 2005.

Shares of Disney rose about 57 percent from October 1, 2005, through the end of 2011. The S&P 500, by comparison, inched up 1.4 percent over the same period.

Disney said Iger's pay was in line with that of media industry peers. His total compensation rose 13 percent in fiscal 2011 to $33.4 million in the 12 months to September.

For their most recently reported fiscal years, Viacom (VIAB.O) CEO Philippe Dauman's earned $43.1 million while News Corp (NWSA.O) Chairman and CEO Rupert Murdoch collected $33.3 million. Time Warner (TWX.N) CEO Jeff Bewkes earned $26.3 million in 2010.

Last year, ISS objected to Disney agreements to pay taxes on any severance packages for some executives if they lost their jobs following a sale or merger of the company. Disney dropped those provisions.

(Reporting By Lisa Richwine; Editing by Gerald E. McCormick and Steve Orlofsky)

Wynn withdraws Macau announcement, shares climb

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The stock, halted after that initial run-up, resumed trade shortly after and closed up 4.27 percent at $127.27.

Earlier on Friday, Wynn said a land concession contract had been published in the official gazette of Macau, a step toward allowing the company and a partner to develop a long-envisioned luxury hotel and casino resort in the world's largest gambling market.

But the company then back-pedalled, saying an "agent" had erred and had not been authorized to file that statement. Wynn's lawyers Skadden, Arps, Slate, Meagher & Flom apologized via a statement later for their error, blaming the slip-up on a clerk in their filing department without elaborating further.

"Many are speculating this (Macau project) is ready to go. The stock is reacting on that view," said David Bain, managing director with Sterne, Agee & Leach.

Friday's unusual turn of events come as Steve Wynn, the mogul who runs Wynn resorts, is embroiled in a bitter battle with Japanese billionaire and former friend Kazuo Okada.

Last month, Wynn Resorts redeemed Okada's nearly 20 percent stake in the company and accused him of violating U.S. anti-corruption laws, citing a report produced after an internal probe. Okada said the report is based on "false and misleading assertions.

Okada has said he is seeking to file a lawsuit for a temporary restraining order and preliminary injunction to protect the interest of his subsidiary, Aruze USA Inc, in Wynn Resorts, and to prevent the redemption of its shares.

"As of right now, we don't see a huge risk of Wynn being negatively affected by the whole Okada saga," Morningstar analyst Chad Mollman said. "Where they are at risk is if they were to give back Okada's shares. That would be a huge negative on the stock."

For now Mollman is maintaining his fair value estimate of $175 per share, noting that if Okada is unsuccessful in blocking the redemption of the shares at a steep discount, the redemption stands to increase his fair value estimate by $25 per share or more.

While casino companies in the past have forcibly redeemed shares of shareholders deemed unsuitable, historically this has occurred following an outside regulatory finding. Analysts say this appeared to be the first time a casino company is redeeming shares ahead of such a finding.

MACAU BOOM

Wynn is proposing the development of 51 acres of land in the Cotai area of Macau for development into its third resort in the city, encompassing a five-star hotel, gaming areas, retail, entertainment, food and beverage, spa and convention offerings.

Analysts have been keen to pin down a specific timeline on that project, which Chief Executive Steve Wynn has said will house 500 game tables; 1,500 rooms, mostly suites; restaurants and stores, and a theater.

The "report regarding the gazetting of the Cotai Land Concession Contract on Form 8-K ... was filed by mistake by the Company's agent," Wynn said in a filing after withdrawing its statement on Friday.

"The filing was not authorized by the Company. The Cotai Land Concession Contract has not been gazetted. The purpose of this filing is to retract the Land Concession 8-K in its entirety."

Subsidiary Wynn Macau (1128.HK) said in September it had formally accepted the terms and conditions from the government regarding land for the complex.

Prior to the trading halt, Wynn shares were up $7.70, or 6.3 percent, at $129.76 on Nasdaq.

(Additional reporting By Jonathan Stempel and Edwin Chan; Editing by Mark Porter, Tim Dobbyn and Richard Chang)

RIM may warn on BlackBerry shipments, analyst says

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The latest version of the smartphone - using the legacy BlackBerry 7 operating system that RIM will replace later this year - has failed to impress demanding U.S. consumers, Jefferies analyst Peter Misek wrote in a note to clients.

Tepid shipments are likely to translate into weaker-than-expected results for the company's fourth quarter ending March 3, he said. That could lead RIM to tip its hand before the formal release of its results on March 29.

Perhaps just as worrying, Misek said, consumer acceptance for RIM's smartphones is starting to erode in Latin America and Europe, where sales of cheaper devices have provided a cushion for the Canadian company as it falls behind the pace in the United States.

"There is a greater than 50 percent chance that RIM will negatively pre-announce the February quarter," said Misek, who is rated five stars by Thomson Global Markets StarMine for the accuracy of his earnings estimates on RIM.

FIVE QUARTERS OF DECLINE IN U.S.

It would not be the first time that the Waterloo, Ontario-based company has decided to come clean before releasing its results. It issued a sharp profit warning ahead of third-quarter results in December, sending its shares into a tailspin. It also revised its forecasts last April before the end of the quarter.

RIM's U.S. sales have fallen for five straight quarters, as consumers embrace Apple's iPhone and high-end devices running Google's Android software. The company has typically offset the decline with rising sales elsewhere.

"We believe Street numbers will likely be revised down given the lack of major new products in the near term and continued sales challenges due to competitive pressure from both low-end and high-end devices," said Misek, who rates the stock "underperform".

RIM's shares have slumped 80 percent from a peak in February last year as it misjudged the shifting landscape and botched the launch of the PlayBook, a poor-selling alternative to Apple's iPad tablet.

It has delayed the planned launch of new BlackBerry smartphones running on the same QNX system as the PlayBook until late 2012. Analysts view the launch of what RIM has dubbed the BlackBerry 10 as a "make or break" event.

Misek said RIM likely shipped fewer than 11 million legacy phones in the December-February quarter, a sharp drop from the previous three months as well as from the year-earlier Christmas season, traditionally the strongest period of the year for smartphone sales.

In December, RIM said it expected to ship between 11 million and 12 million handsets in the Christmas quarter ending March 3.

APPLE'S IPHONE 5 ON THE HORIZON

He lowered his quarterly earnings estimates to 69 cents a share on revenue of $4.2 billion, down from his earlier expectation of 82 cents a share on revenue of $4.6 billion.

At least for now, the average analyst forecast is for 83 cents a share on revenue of $4.58 billion, according to Thomson Global Markets I/B/E/S. RIM is aiming for between 80 and 95 cents a share and revenue of between $4.6 billion and $4.9 billion.

Misek is not alone in seeing lackluster BlackBerry shipments. Morgan Stanley analyst Ehud Gelblum dropped his estimate to 9.6 million from 11.5 million earlier this month.

Adding to RIM's woes, Apple is expected to launch an iPhone 5 before RIM puts out a QNX-based BlackBerry 10 device. Misek, who expects the new RIM device in September, said the debut of the new iPhone was particularly troubling for RIM, and he cut his price target on RIM's U.S.-listed shares to $12 from $15.

The shares slipped 4.6 percent to $13.51 by mid-morning on the Nasdaq. RIM's Toronto-listed shares are down 5 percent at C$13.33.

(Additional reporting by Sruthi Ramakrishnan in Bangalore; Editing by Frank McGurty)

Monster soars as CEO mulls "strategic alternatives"

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"Our shareholders deserve a better return," Iannuzzi told an investor conference. "The board and the management is also focused on pursuing all strategic alternatives to increase shareholder value."

Iannuzzi did not specify what alternatives the company was considering. However, investors typically interpret discussions of "strategic alternatives" as an indication a company is considering selling all or part of itself.

A Monster spokeswoman declined to elaborate on Iannuzzi's statements.

Prior to Thursday's rally Monster shares had tumbled about 61 percent over the past year, a far steeper slide than the 21 percent fall of the Thomson Global Markets United States Employment Services Index.

One analyst cautioned that there were no signs that a deal for Monster was imminent.

"We know of no buyer poised to scoop up MWW," James Janesky of Avondale Partners wrote in a note to clients. He said that the company could sell for $10 to $13 per share, but held steady his "market perform" rating and $8 target price on the stock.

"Given that the company is engaged in layoffs of 7 percent of its work force and other restructuring, any kind of deal might be a ways off," Janesky wrote.

COMPETITIVE THREATS

Slow hiring as a result of the weak U.S. economy and rising competition from the social media sites including Facebook and LinkedIn Corp have taken a toll on Monster's traditional business model -- job ads on its Monster.com website.

When the company reported financial results in January, it warned investors that it expected first-quarter profit to be lower than analysts expected and that it planned to cut its staff by about 7 percent, or 400 jobs.

Iannuzzi said his company regards itself as sharply undervalued compared with its peers, which also include Dice Holdings Inc, Manpower Group and CareerBuilder.com, partly owned by Microsoft Corp.

"The stock price is not where it should be," Iannuzzi said at a R.W. Baird conference. "If you compare us to our competition, any company in our space, our multiple is severely below them."

Shares of LinkedIn have nearly doubled since the company's May initial public offering.

He said Monster has no interest in pursuing takeovers of its own.

"We have no acquisitions in mind," Iannuzzi said. "So if anyone's concerned about where our money is going to go, we don't have acquisitions. Any excess cash will be returned to the shareholders via stock purchase."

The New York-based company has $250.3 million in cash and equivalents on its balance sheet and a market value of $828.4 million, according to Thomson Global Markets Data.

Options traders piled on Monster in the wake of the news, with volume surging 32 times higher than a typical day, according to options analytics firm Trade Alert.

"The positive comments spurred a rush into Monster Worldwide options," said Interactive Brokers Group options analyst Caitlin Duffy.

Shares of Monster were up $1.21, or 17.4 percent, at $8.15 in late trading on the New York Stock Exchange.

(Reporting By Scott Malone in Boston, additional reporting by Doris Frankel in Chicago; editing by Andre Grenon and Mark Porter)

Wal-Mart raises dividend nearly 9 percent

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The increased payout comes as the world's largest retailer works on balancing its need to invest in growing its business with the desire to attract shareholders who have seen Wal-Mart miss out during the broad market rally.

"Part of the reason that people own the stock is that it pays a dividend," said Consumer Edge Research analyst Faye Landes. Wal-Mart wants "to have a nice payout, but they also feel that they have other places to put their capital."

Wal-Mart said its board approved a dividend of $1.59 per share for fiscal 2013, which ends next January, up from $1.46 last year. That equates to paying about $5.52 billion to shareholders.

The family of founder Sam Walton stands to get about half of that payout, as it owns close to 50 percent of Wal-Mart's outstanding shares through various entities.

Wal-Mart has been a big buyer of its shares, spending $6.3 billion on buybacks during fiscal 2012.

Wal-Mart has raised its payout every year since it first declared a dividend of 5 cents per share in 1974. The latest increase comes after a 20.7 percent hike a year ago.

Shares of Wal-Mart, a component of the Dow Jones industrial average, were down 0.4 percent at $58.84 after rising to $59.42 earlier in the day. This year, shares of Wal-Mart fell 1.1 percent, while the Dow rose 6 percent, through February 29.

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Graphic on Wal-Mart dividend: link.reuters.com/wam86s

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"BACK ON TRACK"

Wal-Mart has high expectations for the current fiscal year, with the core Walmart U.S. business "back on track," Chief Executive Mike Duke said in a statement.

Walmart U.S. posted its second straight rise in quarterly same-store sales last week, and traffic in the stores rose for the first time after six quarterly declines.

Wal-Mart continues to invest in areas such as e-commerce, where it trails market leader Amazon.com Inc, and needs to cut costs to keep its prices low in the United States. Wal-Mart's international business is still growing and the Sam's Club warehouse chain has done well.

The dividend increase would bring Wal-Mart's dividend yield up to 2.69 percent based on Wednesday's closing price of $59.08 on the New York Stock Exchange.

While that would keep it among the middle of the pack of the 30 components of the Dow Jones industrial average, it would continue to outpace yields of some other major U.S. retailers. Target Corp's dividend yields 2.12 percent, and Macy's Inc's yields 2.1 percent.

Target, Macy's and other U.S. chains reported February sales on Thursday, and most of them did well.

Wal-Mart's new dividend level is "appropriate," for the company, which has "terrific cash flow," said Raymond James analyst Budd Bugatch.

Wal-Mart's free cash flow fell to $10.7 billion last year from $10.9 billion a year earlier, as capital expenditures outpaced its growth in net cash from operating activities.

Bugatch, who recently downgraded Wal-Mart shares to "market perform," noted that the 8.9 percent dividend increase is above the rate of earnings growth Wal-Mart forecast for the year. Wal-Mart expects earnings per share to rise about 4 percent to 8.4 percent in 2013, to $4.72 to $4.92 per share.

The dividend will be paid in quarterly installments of 39.75 cents per share, with the first payment on April 4 to shareholders of record as of March 12.

Wal-Mart said that it returned $11.3 billion to shareholders through dividends and share buybacks last year. As of January 31, it had $11.3 billion remaining under a $15 billion share repurchase plan announced in June.

(Reporting by Jessica Wohl in Chicago; Editing by Gerald E. McCormick, Dave Zimmerman)

Analysis:Despite crunch, BNY Mellon is a stock-option contrarian

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Since the height of the credit crisis, U.S. banks have reduced or stopped issuing stock options to employees in favor of so-called restricted stock shares. Like options, the shares cannot be cashed in for several years, but employees can pocket some gains from them even if the stock price falls.

But BNY Mellon is betting options will encourage executives and employees to work hard and be rewarded if its stock price rises.

Still, experts say BNY's contrarian stance could expose the world's largest custody bank to staff departures because executives and rank-and-file employees are more likely to jump ship if the company's stock remains mired at about $22. BNY shares peaked at almost $50 in December 2007.

"This has a very demoralizing effect on employees," said Purdue University professor Ben Dunford, who has studied the impact of underwater stock options on morale.

Competitors that switch to restricted stock could gain an advantage over the bank.

"There's not a lot of appetite for options right now," said Alan Johnson, a top Wall Street pay consultant. "The regulators hate them because they say they encourage excessive risk taking."

BNY employs 48,700 people worldwide and at least two-thirds of their 60.2 million in exercisable stock options were deeply underwater at the end of 2011. About 40 million of the options will expire worthless unless BNY Mellon's share price hits $31, an increase of about 38 percent from the current $22.49.

A group of 10 major U.S. banks and asset managers, including BNY, Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co Inc (JPM.N) and State Street Corp (STT.N), issued 66 percent fewer options in 2011 than in 2007, according to an analysis of regulatory filings. Employees of the 10 firms have lost nearly $9 billion in paper profits on their options since 2007, according to annual reports.

BNY Mellon was the only company in the group to issue more in 2011 than 2007, granting 8.74 million options compared with 8 million four years earlier. New York-based BNY Mellon declined to comment.

State Street, BNY Mellon's archrival, stopped issuing stock options several years ago and leans heavily on restricted stock in what has become the preferred strategy for many banks.

But BNY's contrarian attitude may yet prove be the right one because it is awarding options when its share price is depressed, Johnson says. Other banks rely too much on restricted stock and should be awarding more options.

"I've been saying that now for two or three years, but on deaf ears," Johnson added.

In its most recent proxy filing discussing executive compensation, BNY Mellon said it reviewed its pay plans to avoid encouraging excessive risk taking. As a result, the bank added some risk-related controls on compensation, such as tying bonuses and restricted stock awards to reaching certain capital levels.

DEMORALIZED EMPLOYEES

Options can produce big gains for employees when a company's stock price rises. They lose all of their value, however, if the stock falls below the price at the time of the award.

Restricted stock continues to grow in popularity at the expense of the "much-maligned stock option," Hofstra University professor Steven Petra and St. John's University professor Nina Dorata wrote last month in the Journal of Accountancy.

Under current accounting rules, restricted stock reduces corporate income less than options. It also is less dilutive to shareholders because they achieve their goal with fewer shares, they said.

BNY Mellon also issues restricted stock, but options remain important. Last month, for example, Chairman and Chief Executive Gerald Hassell received 434,412 options, or 53 percent more than he received in restricted stock, U.S. regulatory filings show.

REPRICING NOT AN OPTION

Even though the Standard & Poor's 500 Index has more than doubled since the stock market's nadir in early March 2009, the financial sector has lagged far behind and most bank-issued options remain underwater. Tens of millions of options have been canceled or forfeited over the past three years as they expired out of the money.

After the dot-com bust, many tech companies repriced their options to keep their talent. But accounting rule changes, such as mandatory expensing along with stricter corporate governance, have made repricing more difficult.

The total intrinsic value of BNY Mellon's outstanding employee stock options, or the paper profits from all in-the-money options, was just $22 million in 2011, down from $875 million in 2007.

Over the past two years, 28.5 million of these employee options have been canceled. That happened largely because BNY Mellon's stock price was below the exercise price when they expired. Options are also canceled if an employee leaves before the vesting date.

(Reporting By Tim McLaughlin; editing by Aaron Pressman, Walden Siew and Andre Grenon)

Overstock.com posts surprise qtrly loss on higher costs

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The company, which saw its sales stumble after Google Inc (GOOG.O) penalized it for breaching some of search giant's guidelines in February last year, has been trying to attract online shoppers by spending more on advertising and marketing.

It has also been trying to woo shoppers with its Club O loyalty program to move away from less revenue generating coupons and other promotions.

The company said sales and marketing costs rose 10 percent and general & administrative and technology expenses shot up 24 percent in the quarter.

Overstock.com posted a fourth-quarter loss of $3.4 million, or 15 cents a share, compared with earnings of $14.9 million, or 63 cents a share, in the year ago period.

The company, which is attempting to rebrand itself from Overstock.com to O.co, said revenue fell 10 percent to $314.1 million in the quarter.

Analysts, on average, had expected the company to earn 45 cents a share, on revenue of $377.6 million, according to Thomson Global Markets I/B/E/S.

Overstock.com shares were trading at $6.32 in premarket trading. They had closed at $6.88 on Thursday on the Nasdaq.

(Reporting by Arpita Mukherjee in Bangalore)

Shutterfly jumps on acquisition of Kodak's photo sharing site

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Kodak said the deal with Shutterfly followed a "stalking horse" bid -- a starting bid or minimally accepted offer that other bidders must surpass in a court-supervised auction -- from the web-based personal publishing service.

Analysts expect the deal to boost Shutterfly's earnings in 2012 and solidify its position in the online print market.

"By taking out the number three player with an estimated about $70 million in FY11 revenues, Shutterfly will eliminate a sizable competitor and solidify its position as the largest player in online consumer print," Jefferies said in a note.

Kodak is the number three player in the sector behind Shutterfly and Hewlett Packard's (HPQ.N) Snapfish.

Kodak Gallery -- which enables users to store and share their own images and create custom printed photobooks, cards and albums -- has more than 75 million users.

"The deal not only offers Shutterfly a healthy base of new customers at an attractive acquisition price, but also a group of photo enthusiasts that should adapt well to Shutterfly's platform and product offering, and present new cross-selling opportunities," Baird Equity said.

The brokerage estimates Kodak's Gallery business to generate revenue between $50 million and $70 million.

Shares of the Redwood City, California-based company, which have lost about half their value since their year high in April, jumped 18 percent to $31.84 Friday on the Nasdaq. (Reporting by Rachana Khanzode in Bangalore; Editing by Saumyadeb Chakrabarty)

Yelp soars in market debut on Facebook optimism

Stock Market Predictions

Yelp's stock closed 64 percent higher at $24.58, a day after Yelp priced its IPO at $15 a share - above its indicated range of $12 to $14.

At Friday's closing price, the company is worth about $1.47 billion - about 17 times its 2011 revenue.

"If you look at it, there's been a very high trading volume, much higher than normal," said Scott Rostan, a former Merrill Lynch analyst who founded Training The Street, an investment banking school in New York.

Yelp could be benefitting from the optimism about Facebook's upcoming IPO, he added. "Investors are getting a little excited; there's a social media momentum."

Yelp's stellar debut follows those of other Internet sensations like LinkedIn Corp, Groupon Inc and Zillow Inc. But while those stocks made large first-day gains, they have since declined.

Groupon stock's soared as much as 56 percent on its opening day, but has since fallen below its offer price of $20.

Like Yelp, Groupon is losing money. Yelp generates revenue by selling advertising on its sites, where it has more than 25 million reviews of a range of local businesses and services - from plumbers and shoe-repair shops to restaurants and nightlife options.

Yelp also competes with Angie's List, which unlike Yelp charges for memberships and whose stock fell 5.4 percent on Friday.

"Angie's List charges for memberships. That will prevent growth. It can maybe grow to 2 million memberships, but there's a finite number of people who want to pay to access this content," Sameet Sinha, an analyst at B. Riley & Co, said.

"Their unique visitor growth accelerated in the past year and they are forecasting solid growth over the next few years," Sinha said.

The company, however, faces stiff competition from Facebook; Google Inc, through its recent buy of restaurant reviewer Zagat; and others like Groupon and Angie's List.

Stoppelman told CNBC that he was not fazed by competition from the likes of Google.

"That's a potentially lucrative market, which could be interesting for some big companies such as Google, Facebook to muscle in," Rostan said.

"It could make Yelp a takeover candidate. As a public company it is a little harder to turn down an offer and it could be a $2 billion morsel for an established company to enter that market," he said.

According to media reports, Yelp has rejected approaches by Google and Yahoo in the past.

AMAZON OF LOCAL ADVERTISING

The San Francisco-based company was started eight years ago in 2004 by former PayPal engineers Jeremy Stoppelman and Russel Simmons, when Stoppelman needed a doctor and online searches turned up only generic lists on health insurance websites.

Stoppelman, a computer engineer by training, told CNBC he wanted his company to become the Amazon.com Inc of local advertising.

"We're just scratching the surface of local advertising," Stoppelman said. "It's an enormous market."

Yelp had 66 million unique visitors and was used in 5.7 million unique mobile devices on a monthly average basis in its latest quarter. It was active in 46 markets in the United States and 25 internationally at the end of last year.

But the company has incurred losses since inception, and had an accumulated debt of about $41.2 million as of December 31.

In 2011, Yelp recorded a loss of about $17 million but saw revenue jump 74 percent to $83.3 million.

Like a slew of recent tech and Internet offerings and the upcoming Facebook IPO, Yelp will have two classes of stock - class A shares worth one vote each and class B shares with 10 votes each.

This structure is seen by many as a method to keep voting power restricted to the major stockholders as the outstanding class B common stock will represent about 98.7 percent of voting power following the offering.

Scott said this may be the time for more Internet companies to seek a public listing.

"In the IPO market there's a window of opportunity, when it's open you better rush through it before it closes," Rostan said, adding that LinkedIn's IPO in May last year created a window until about August.

"There needs to be some kind of event to open it (the window) and Facebook might be that event," he added.

B. Riley's Sinha noted that Yelp was a good investment ahead of Facebook.

"In general, crowd sourcing, social and mobile are the key buzz words for investors and Yelp hits them all. Before Facebook comes along, this is a good social and mobile play for investors," Sinha said.

Goldman Sachs is the lead bookrunning manager for the offering, while Citigroup and Jefferies acted as joint bookrunning managers.

(Reporting by Aman Shah, Tanya Agrawal in Bangalore and Alistair Barr in San Francisco.; Editing by Supriya Kurane, Lisa Von Ahn and Richard Chang)