Elliott Investment Management has taken a notable stake in online dating platform Match Group (NASDAQ:MTCH), the Wall Street Journal reported. Per the report, Elliott has injected $1 billion into MTCH, representing approximately 10% of the company’s current market capitalization.
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This comes at a time when the Match Group, the parent company of Tinder, is struggling to increase its paid member base on the platform. The significant stake acquired by Elliott suggests that the activist investor could push management to take steps to enhance the company’s financial performance and increase its stock value. However, Elliott’s specific demands remain undisclosed at this time.
Shares of Match Group have dropped 13.6% over the past year, underperforming the broader markets. The stock’s underperformance reflects the continued decline in paid members. The company had 15.7 million payers at the end of Q3, down 5% year-over-year. Tinder, which accounts for most of its revenue, witnessed a 6% year-over-year decline in payers. Moreover, Tinder payers were down by 56,000 sequentially in Q3.
Is MTCH a Buy or Sell?
Match Group is taking steps such as price optimization to boost its financials. However, Wall Street is cautiously optimistic about MTCH stock, given the decline in payers and weak ad demand.
Match Group has 12 Buy and six Hold recommendations for a Moderate Buy consensus rating. Further, analysts’ average price target of $43.76 implies 15.49% upside potential from current levels.
