The shares dropped $4.26, or 10%, to $38.18 -- giving Yelp a total market value of about $2.9 billion -- after trading as low as $36.10 during the session.
The company's Yelp.com website provides consumers with search and review features for restaurants and other businesses, and it's been struggling lately to maintain its growth in visitors to the site.
Yelp "has temporarily decided" not to pursue a sale of the company,
The San Francisco company might pursue the deal again if Yelp Chief Executive Jeremy Stoppelman changes his mind, Bloomberg said.
Yelp declined to respond to the report, saying via email, "We do not comment on speculation or rumor."
Yelp's willingness to explore a sale was reported in May by the Wall Street Journal, a report Yelp also declined to comment about.