Bear Cave Raises Red Flag On Yelp Stock, Shares Slump

Shares of Yelp Inc. (NASDAQ:YELP) are slipping Thursday after The Bear Cave raised concerns, reportedly stemming from hundreds of consumer complaints. Yelp stock is showing downward pressure. What’s ahead for YELP stock? Bear Cave Alleges Problems At Yelp The Bear Cave said it obtained “hundreds of consumer complaints” alleging that Yelp has engaged in misleading and fraudulent billing, deceptive free trials and cancellation notices, and misleading telemarketing. Benzinga has reached out to Yelp for comment on the report. According to the Bear Cave, a pattern of complaints has emerged that allege Yelp's remote sales team pushes small businesses to start free ad campaign trials then charges them months later after they believe they have canceled the trials. “The documents reviewed by The Bear Cave contain repeated complaints about deceptive free trials, misleading cancellation notices, and surprise billing,” the research firm said. The Bear Cave went on to highlight reported instances in which sales representatives for Yelp would call businesses repeatedly even after those businesses requested to be on Do Not Call lists. The Bear Cave argued that billing fraud complaints are a strong indicator that a company is overstating the strength of its customer relationships and revenue. YELP Stock Hovers Near Key Averages Yelp is trading 3.3% above its 20-day simple moving average (SMA), the stock's average price over the last 20 sessions, which suggests short-term buyers still have some control. At the same time, it's trading 6.7% below its 100-day SMA, a sign the intermediate trend is still trying to repair prior damage. Over the last 12 months, the stock is down 34.40%, a backward-looking reminder that rallies have been occurring inside a bigger drawdown. Within its 52-week range ($19.60 to $41.22), the current level sits well off the highs, which is consistent with a recovery attempt rather than a fully restored uptrend. YELP Shares Move Off Highs Of Session YELP Stock Price Activity: Yelp shares were down 0.20% at $25.14 at the time of publication on Thursday, according to Benzinga Pro data. The stock fell from the highs of the session around $25.56 shortly after the report was released. Image: Shutterstock.com