TCS Capital Management said Yelp stock is "shockingly undervalued"
The shares of Yelp Inc (NYSE:YELP) are up 9.8% at $35.69 at last check, after TCS Capital Management asked the company to explore strategic options, including a sale or merger with internet services concern Angi (ANGI). The activist investor, which is among Yelp's top shareholders, noted the stock is "shockingly undervalued" and could be sold for more than double its share price.
The equity is trading at its highest level so far this year, as it paces for its biggest single-day percentage gain since early November and consolidates above the 320-day moving average. Shares saw a series of bull gaps after pulling back to the $26 level to start off the month, and now boast an 18.9% lead in 2023.
Options traders are fiercely bullish, per YELP's 10-day call/put volume ratio of 43.27 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher all but 1% of from the last 12 months.
Now looks like a good time to weigh on Yelp stock with options, too, per its Schaeffer's Volatility Index (SVI) of 32%, which stands in the low 10th percentile of its annual range. This means options traders are pricing in low volatility expectations at the moment, and premiums are affordable.