According to a Wall Street Journal story published on Monday, activist investor Elliott Investment Management has amassed a nearly $1 billion investment in Match Group and intends to pressure the company that owns the Tinder dating app to enhance its performance.
According to people familiar with the situation, Elliott also intends to pressure Match to take action to raise its ailing stock price, as reported by the Journal. But it was unable to discover Elliott’s precise requirements.
A Match representative told Reuters in a statement that “our team regularly engages with investors, and will continue to work to create great experiences for our users and value for our shareholders”.
A request for comment from Reuters was not immediately answered by Elliott.
Due to economic uncertainty, American consumers are hesitant to spend money on luxuries like dating app memberships. As a result, advertisers are cutting down on expenditure, which has an effect on Match’s portfolio of dating apps, which also includes Plenty of Fish, Hinge, and OKCupid.
In October of last year, Match released a fourth-quarter revenue prediction that fell short of market expectations. A month later, Bumble (BMBL.O), a smaller competitor, released a similar view.
To spur its growth, Match has launched a number of new features, such as weekly subscription levels and improved privacy and engagement tools for both Tinder and Hinge.
After a 12% decline in its stock price in 2023, the corporation is today valued at roughly $10.30 billion. Almost 80% of the share price has been lost since the COVID-19 epidemic highs were reached.
Prior to this, Match Group—the parent firm of the dating applications Hinge and Tinder—was trading at its lowest point since it split off from IAC in July 2020. At roughly $29 per share, the stock finished over 15% lower.
Match surpassed analyst projections published by LSEG, formerly known as Refinitiv, when it announced third-quarter earnings on Tuesday. The company reported $881.6 million in revenue, which was higher than expected, and earnings of 57 cents per share, or three cents over expectations.
In addition, analysts voiced concern over declining Tinder subscription rates and reduced revenue estimates for the fourth quarter.
Analysts at JPMorgan described the third-quarter results as “solid,” noting that the largest surprise was the revenue forecast for the fourth quarter, which Match predicted would be between $855 million and $865 million. Compared to the consensus expectations of around $890 million, that is significantly less.
