By Match Group shares experienced a boost on Tuesday following the news that activist investor Elliott Investment Management has acquired a significant stake in the company. Despite being a dominant player in the online dating industry, Match has been facing concerns about market saturation, which has impacted its stock performance.
According to sources familiar with the matter, Elliott has built a position worth approximately $1 billion in Match, as reported by The Wall Street Journal. This development has resulted in Match shares rising by 11% to reach $42 during premarket trading on Tuesday. However, despite this increase, the stock is still substantially below the peak of around $160 it reached in 2021, when the surge in online dating spending occurred due to the Covid-19 pandemic.
This situation presents an opportunity for Elliott Investment Management as an activist investor. It should be noted that Match recently appeared on a stock screen by Evercore, which identifies undervalued stocks that could potentially rebound this year.
The focus for Elliott will be on addressing the continued decline in paying users on Match’s popular Tinder app. This decline is expected to become more pronounced in the current quarter following price increases implemented last year. Discussions between Elliott and Match may also involve exploring strategies to replicate and build upon the success of Match’s Hinge app. Hinge caters to users seeking more serious relationships and represents Match’s fastest-growing platform.
In response to inquiries, a Match spokeswoman assured that the company regularly engages with investors and remains committed to delivering exceptional user experiences and shareholder value.
Among Match’s competitors, Bumble saw a 3.5% increase during premarket trading, while Grindr remained unchanged.
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