Yelp investors are getting ready for a rocky ride Wednesday, when a “lockup” period expires for the social media site’s shares, allowing insiders to sell them in the open market.
Yelp went public in March, and its share price has outperformed those of other companies in the social media space, including Zynga and Facebook. But Yelp's shares are down from a peak of $28 hit on March 28.
The fact that company insiders -- including venture capital firms Bessemer Venture Partners and Elevation Partners -- didn’t sell shares at the IPO leads some to believe they will sell shares on Wednesday, said CNBC’s Julia Boorstin.
Investors in social media stocks are likely nervous after venture capitalist and Facebook board member Peter Thiel sold the bulk of his stake in Facebook after a lockup period expired recently, suggesting he is not optimistic about the stock’s future performance.