It has been more than a month since I indicated that YELP has no a sustainable business model in this environment and its stock was going to crash. It was way before the FB IPO and the tape showed that the stock was doomed short term. Several factors have contrubute to this decline: competion (numerous web players fishing in the local market, including GOOG); extortion lawsuits, although dismissed, they undermied company’s reputation; FB failure; market decline; unprofitable quarter and lack of an upside surprise-expected but still damaging, ravaging shorts, etc. What surprises me is Fly’s conviction with respect to this stock-he usually cut his lossess very quickly if the investment thesis does not work. Apart from his holding into VXX, in similar circumstance he quick cut his huge losses in Palm. Is there any future in YELP? It is a big question, the best scenario would be its acquisition.  As an alternative, I would look into DDD, INVN, AIG, WNR, TFM, ARCO, UAN those stocks held up very well in the last few days and appear poised to the upside short and long term.

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