Gillian Tan is a Bloomberg Gadfly columnist covering deals and private equity. She previously was a reporter for the Wall Street Journal. She is a qualified chartered accountant.

David Einhorn's Greenlight Capital sure must be thankful it gave the green light to Yelp. 

The group's funds lost 2.6 percent in the three months ended June 30 owing to its bets against Amazon and an undisclosed oil-fracking company, as well as its holdings of Macy's and Apple. But it could have been worse: That result was cushioned by a 53 percent jump in Yelp shares during the quarter, and as it turns out, there was more where that came from.

Yelp rallied as much as 15.1 percent on Wednesday to a 13-month high of $37.57 after the consumer-review website posted a surprise profit. The company now trades at more than double its February low of $15.23, which may have been around the time Einhorn began amassing its stake.

On the Rebound
Yelp shares rallied to their highest level since July 2015 after the review site posted better than expected second quarter results
Source: Bloomberg

The news wasn't all good, though. The company's 108 million reviews attracted fewer eyeballs in the period, continuing a trend of decelerating traffic that should be worrisome to investors who are believers in the company's growth prospects. 

Hitting a Plateau?
Yelp's traffic growth has begun to flatten over the past two years
Source: Company filings
*Traffic measured on a monthly average basis

UBS analyst Eric Sheridan cites Yelp's dependence on Google for roughly 50 percent of its traffic as a reason to remain cautious, in part due to unpredictable actions such as the removal of right-side ads from the search engine giant's results page earlier this year.

Not to mention Google, like Facebook and OpenTable, is competing against Yelp with its own review service. That puts the pressure back on the $2.9 billion company to pursue growth by boosting spending on sales and marketing, which in turn could jeopardize its ability to consistently turn a profit. 

Hello Headcount
Yelp's sales team is growing, which could crimp the company's margins
Source: Company filings

With two solid quarters under its belt, Yelp is moving in the right direction, leaving shareholders with fewer regrets about the company's decision last year to remain a stand-alone business. Whether it can maintain its momentum -- and whether Einhorn will stick around to see how it plays out -- remains to be seen. At this point, it gets a mixed review. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Gillian Tan in New York at

To contact the editor responsible for this story:
Beth Williams at