Match Group (NASDAQ: MTCH), a leading company in the online dating industry, operates well-known platforms such as Tinder, Hinge, and OkCupid. The company has recently been in the spotlight due to a significant investment by the activist hedge fund Starboard Value, which has acquired approximately 6.6% of Match Group, making it the third-largest shareholder.
Starboard Value’s involvement is not just a passive investment. In a detailed letter to Match Group’s leadership, Jeffrey Smith, Starboard Value’s Managing Member, outlined several recommendations aimed at boosting the company’s financial performance. Among these suggestions was the need for Match to improve its profit margins, with a specific target to elevate its adjusted operating margins above 40%. This is a significant point of focus, considering Match Group’s revenue has grown from around $2 billion in 2019 to an expected $3.6 billion this year, yet its adjusted operating margins have declined during the same period.
Additionally, Smith proposed that Match Group should ramp up its stock buyback efforts. This strategy involves the company repurchasing its own shares, which can benefit shareholders by increasing the value of remaining shares and reducing the overall number of shares outstanding. Such a move is seen as an effective use of cash that could enhance shareholder value. Furthermore, Smith mentioned that if Match Group is unable or unwilling to implement these suggestions, the company could also consider going private, with Starboard expressing its support for such a move.
The news of Starboard Value’s investment and its push for strategic changes has had a positive impact on Match Group’s stock, which saw an increase of more than 9% to $35.00 by 7:45 a.m. ET Tuesday. This uptick is particularly noteworthy, considering the stock had experienced a loss in value of approximately 12% so far this year through Monday. The current trading price of $32.88, with fluctuations between $32.86 and $33.35 during the trading day, reflects the market’s ongoing assessment of Match Group’s value and potential. With a market capitalization of around $8.74 billion and a trading volume of 656,094 shares, Match Group remains a significant player in the online dating market, now under the watchful eye of Starboard Value and its proposed strategic initiatives.
To view the company’s Q1 earnings release, visit https://ibn.fm/EZJ82
About Match Group
Match Group, through its portfolio companies, is a leading provider of digital technologies designed to help people make meaningful connections. Its global portfolio of brands includes Tinder(R), Hinge(R), Match(R), Meetic(R), OkCupid(R), Pairs(R), PlentyOfFish(R), Azar(R), BLK(R), and more, each built to increase its users’ likelihood of connecting with others. Through the company’s trusted brands, it provides tailored services to meet the varying preferences of its users. Match Group’s services are available in over 40 languages to users all over the world.
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