Active Stocks
Thu Mar 28 2024 15:29:53
  1. Tata Steel share price
  2. 156.45 2.36%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,446.50 0.40%
  1. ITC share price
  2. 428.30 0.07%
  1. Power Grid Corporation Of India share price
  2. 277.15 2.25%
Business News/ Companies / News/  Facebook’s foray into the dating scene looks like no match for Match
BackBack

Facebook’s foray into the dating scene looks like no match for Match

When the social media giant announced plans in May to launch an in-app dating feature, Match shares fell 22%. That, however, appears to have been just a blip

Facebook recently rolled out its dating service in Colombia.Premium
Facebook recently rolled out its dating service in Colombia.

New York: Match investors appear to have gotten over their Facebook fears.

When the social media giant announced plans in May to launch an in-app dating feature, Match Group Inc. shares fell 22 percent. That, however, appears to have been just a blip. The stock is up more than 50 percent since May 1 and has gained 81 percent for the year.

Chief Executive Officer Mandy Ginsberg, who took over the top position in January, isn’t sitting still. She hears the footsteps loud and clear and is keeping a watchful eye on Facebook’s developments.

“We’ll have to see what happens and keep an eye on it," she said in a phone interview, noting that history has shown the tech behemoth’s market power shouldn’t be underestimated.

Among Match’s not-so-secret weapons is Tinder. In the company’s latest quarterly report, key metrics like increases in subscriber growth and earnings before interest and other items were driven by the swiping app.

“I’ve never seen anything quite like Tinder, it’s in a bit of a league of its own," Ginsberg said. “It started and in a couple years into its growth, it just went global really fast."

Match is trading at about $57 now, above its average estimated price target of $53. Wall Street had already begun souring on the Dallas-based company even before Facebook’s announcement. JPMorgan, Guggenheim and Wells Fargo cut their ratings to neutral from buy in February and March, according to data compiled by Bloomberg. The stock has 8 buys, 8 holds and one sell.

Jefferies analyst Brent Thill is among those defending Match. He upgraded the stock to buy from hold in June. He doesn’t see Facebook as a threat, at least not in the short term.

“There is no question Facebook will have some impact," he said. However, Thill said he believes “the market is big enough to support multiple vendors."

Perhaps Match investors should be more worried about what’s going on with Bumble, another millennial-focused dating app, said Thill.

“Look Bumble’s a great asset," said Thill. “It’s the only major platform out there that they don’t own."

Last year, Match made an offer to acquire Bumble. And then there’s a possible scenario of Bumble hooking up with Facebook. After Facebook’s May dating announcement, Bumble released a statement saying, “Our executive team has already reached out to Facebook to explore ways to collaborate."

Match is expected to report fourth quarter earnings next month.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 02 Oct 2018, 07:31 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie