Yelp board targeted by activist hedge fund

Like that delivery guy who takes an hour and a half to deliver your spicy wings, Yelp’s board is suffering from a “lack of urgency.”

That’s according to SQN Investors, a hedge fund that’s looking to shake up the board of the struggling online-reviews site. SQN, which owns 4 percent of Yelp shares, griped in a Monday letter to Yelp’s lack of urgency has cost it market share versus Google and Facebook.

The billion-dollar hedge fund, which hasn’t previously made an activist investment, said it has been disappointed by the company’s financial results missing expectations in 12 of the last 19 quarters. Yelp’s average board tenure is nine years, SQN noted.

Yelp shares rose 3 percent, closing at $35.64 on Monday.

Yelp’s stock dropped 27 percent in a single day last month after its third-quarter revenue fell below Wall Street expectations.

Yelp blamed the miss partly on its moving from long-term contracts to “nonterm” contracts with advertisers in an effort to compete with Facebook and Google. Yelp sales reps have been having trouble reaching prospects by phone in their efforts to renew contracts, execs admitted.

“We’re in the process of working through alternative ways to reach local business owners, who are not as receptive to phone calls as they have been in the past,” Chief Operating Officer Jed Nachmann said in last month’s analyst call, adding the company was exploring the use of e-mail, text messages and in-app notifications.

Yelp defended itself Monday noting that it has had “many interactions” with SQN over the last three years and that it works to make sure its board is “highly relevant and diverse.”

“Our board and management team are committed to maintaining an open dialogue with SQN and hearing their perspectives,” the company said.

Meanwhile, critics say Google and Facebook have been able to ramp up their own online review platforms — creating a more seamless way for users on the social media platform to access reviews of local businesses.