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Match Group prepares for Elliott's demands

Jan 10, 2024
Data: Yahoo Finance; Chart: Axios Visuals

Elliott Management enters Match Group's shares as its stock languishes, a steady drop that tracks with heavy pressure weighing on the entire online dating industry.

Why it matters: The arrival of one of the largest and most aggressive activist investors will surely come with some drastic demands meant to boost shares, including potential leadership and strategy changes.

Of note: On Tuesday, Match promoted Tinder COO Faye Iosotaluno as the brand's CEO. Bernard Kim has been serving as both CEO of Match and interim CEO of Tinder since August 2022.

Zoom in: Many young people are simply not that into dating apps. According to a recent Axios/Generation Lab survey of college and graduate students nationwide, 79% of respondents said they do not use any dating apps.

  • Match has tried to draw Gen Z to its most popular app, Tinder, with a new marketing campaign including a push on college campuses. It's also made product changes that connect people through more than just swiping on images, such as a "Profile Quiz" feature.
  • But monetization is tricky with price-conscious consumers and a competitive ad market. Match said in its third quarter earnings report that "payers" to Tinder fell 6% year over year as it increased prices and that it expected more churn in the fourth quarter.

Yes, but: Not everyone is down on the company.

  • J.P. Morgan analyst Cory Carpenter named the stock a top pick. In a Sept. note, he said investors were "too pessimistic" about the industry and that Match was "well positioned as the clear leader in online dating."
  • A Tuesday note from Gordon Haskett said it "didn't see a whole lot for an activist to do," noting a recent headcount reduction and a capital allocation plan. The firm expected the stock to have a "good chance" of improving if Tinder combats its "subscriber losses."
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