Yelp surges 14% after activist investor reportedly calls on board to explore a sale

• Yelp jumped as much as 14% Tuesday, heading for its biggest single-day increase since August.
• The Wall Street Journal reported that an activist investor has called on Yelp to explore a sale.

Yelp stock surged as much as 14% on Tuesday as investors reacted to a report that said an activist investor asked the company explore strategic options, including a sale.

Shares of the recommendation site rose to a premarket high of $37.19, heading for its biggest single-day increase since August 5.

One of Yelp's largest shareholders and activist investor, TCS Capital Management, plans to deliver a letter to the company's board on Tuesday, calling for directors to explore alternatives such as a sale, the Wall Street Journal reported, citing people familiar with the matter.

Eric Semler, the investment firm's founder and president, also reportedly plans to tell Yelp's board that the fund could make its own bid to acquire the company.

TCS Capital believes that Yelp could rake in at least $70 per share, almost double its current trading levels, during a sale to another company or private equity buyer

"Yelp maintains an active dialogue with our shareholders and values constructive feedback on our business and ways to create value," a spokesperson told Insider in a statement.

Yelp stock, which has a market capitalization of about $2.5 billion, is up nearly 31% year-to-date. The shares, which simmered to $36.26 intraday, are down roughly 69% from a record high of almost $100 in 2014.