Tinder and Hinge parent Match Group faces an activist investor campaign that wishes the dating app giant to either overhaul its business or explore going private.
Starboard Value, which revealed Tuesday that it has built a 6.6% stake in Match Group, is in ongoing talks with the corporate and its board regarding ways to spice up profitability and cut costs, the activist fund’s boss Jeff Smith said in a letter.
Smith argued that Tinder has suffered from a “lack of innovation” that has hurt its growth despite a base of nearly 10 million paid subscribers.
“Despite Match’s enviable market position and attractive business characteristics, the corporate’s share price has significantly underperformed the market since its separation from its former parent, IAC, in July 2020,” Starboard’s Smith said within the letter.
“If performance fails to enhance, we imagine changes have to be considered, which should include a thoughtful examination of whether Match’s best path forward can be as a non-public company,” the letter added.
Match Group’s shares surged nearly 8% in early trading after the letter surfaced.
The Wall Street Journal was first to report on the push.
Match Group’s stock price has plunged nearly 70% over the past 4 years despite gains within the broader stock market, the letter noted.
The corporate has struggled with mounting competition from the likes of Bumble and other rival dating apps, while its user base has dwindled as consumers in the reduction of on extra expenses during economic uncertainty.
Starboard said Match Group should conduct stock buybacks to “significantly speed up free money flow per share growth.”
“We imagine there is no such thing as a higher use of money for Match than repurchasing its own shares at this level,” the letter said.
A Match spokesperson said the corporate is “relentlessly focused on executing our key initiatives, which include: driving growth at Tinder, continuing Hinge’s impressive expansion, maintaining appropriate financial discipline, and returning capital to our shareholders.”
The Post has reached out to Match Group for comment.
Starboard’s move added to the pressure for Match Group’s leaders, who already faced an activist campaign earlier this 12 months from Elliott Management.
Like Starboard, Elliott has argued that an absence of product innovation has hurt Tinder’s growth.
In response to Elliott’s campaign, Match added Instacart executive Laura Jones and Zillow co-founder Spencer Rascoff to its board.
Starboard has previously launched activist campaigns after taking ownership stakes in firms equivalent to Salesforce and Splunk. The latter firm sold to Cisco last 12 months in a large $28 billion deal.
With Post wires
Tinder and Hinge parent Match Group faces an activist investor campaign that wishes the dating app giant to either overhaul its business or explore going private.
Starboard Value, which revealed Tuesday that it has built a 6.6% stake in Match Group, is in ongoing talks with the corporate and its board regarding ways to spice up profitability and cut costs, the activist fund’s boss Jeff Smith said in a letter.
Smith argued that Tinder has suffered from a “lack of innovation” that has hurt its growth despite a base of nearly 10 million paid subscribers.
“Despite Match’s enviable market position and attractive business characteristics, the corporate’s share price has significantly underperformed the market since its separation from its former parent, IAC, in July 2020,” Starboard’s Smith said within the letter.
“If performance fails to enhance, we imagine changes have to be considered, which should include a thoughtful examination of whether Match’s best path forward can be as a non-public company,” the letter added.
Match Group’s shares surged nearly 8% in early trading after the letter surfaced.
The Wall Street Journal was first to report on the push.
Match Group’s stock price has plunged nearly 70% over the past 4 years despite gains within the broader stock market, the letter noted.
The corporate has struggled with mounting competition from the likes of Bumble and other rival dating apps, while its user base has dwindled as consumers in the reduction of on extra expenses during economic uncertainty.
Starboard said Match Group should conduct stock buybacks to “significantly speed up free money flow per share growth.”
“We imagine there is no such thing as a higher use of money for Match than repurchasing its own shares at this level,” the letter said.
A Match spokesperson said the corporate is “relentlessly focused on executing our key initiatives, which include: driving growth at Tinder, continuing Hinge’s impressive expansion, maintaining appropriate financial discipline, and returning capital to our shareholders.”
The Post has reached out to Match Group for comment.
Starboard’s move added to the pressure for Match Group’s leaders, who already faced an activist campaign earlier this 12 months from Elliott Management.
Like Starboard, Elliott has argued that an absence of product innovation has hurt Tinder’s growth.
In response to Elliott’s campaign, Match added Instacart executive Laura Jones and Zillow co-founder Spencer Rascoff to its board.
Starboard has previously launched activist campaigns after taking ownership stakes in firms equivalent to Salesforce and Splunk. The latter firm sold to Cisco last 12 months in a large $28 billion deal.
With Post wires
