Match Group, the owner of popular dating app Tinder, experienced a surge in its stock prices following reports that activist investing firm Elliott Management had acquired a substantial stake in the company, driving the shares up by as much as 12% during morning trading on January 9, 2024.
The Wall Street Journal's disclosure of Elliott Management's approximately $1 billion investment in Match Group prompted a notable market response, with shares eventually closing up 3% after paring back earlier gains. The activist investor, known for previous successful campaigns at companies like Salesforce and Pinterest, is expected to engage with the Group's management in the near future.
Match Group, which also owns Match.com and various other online dating platforms, has faced challenges in recent quarters following a period of explosive growth during the early days of the Covid-19 pandemic. As of January 8, 2024, the company's market capitalization stood at $10 billion, a significant decrease from its 2021 market cap of over $45 billion.
Elliott Management's involvement with the Group is anticipated to involve discussions with the company's management. While the details of the engagement are yet to be clarified, it remains uncertain whether the investor will nominate its own directors.
Despite recent setbacks, some Wall Street analysts maintain a positive outlook on Match Group. JPMorgan named the stock a top pick in December 2023, citing a projected return to double-digit percentage growth in Tinder among other factors. However, the company reported a decline in Tinder payers in November 2023, along with a fourth-quarter revenue outlook that fell short of expectations.
Match Group has also experienced leadership challenges, with seven CEOs appointed since 2012 – a turnover rate notably higher than the industry average CEO tenure of seven years. This organizational instability may become a focal point in discussions between Match Group and Elliott Management.
A Match spokesperson refrained from commenting specifically on Elliott Management's involvement but emphasized the company's commitment to engaging with investors and creating positive experiences for users and value for shareholders.
Elliott Management, under the leadership of Jesse Cohn, has a track record of successful campaigns, including interventions at companies like Crown Castle and Phillips 66. Cohn, the managing partner at Elliott, has previously held board seats at prominent organizations, including Citrix, eBay, and Twitter.
As Match Group navigates this new chapter with Elliott Management as a major stakeholder, the industry will closely watch for potential changes and strategic initiatives that may arise from this collaboration, signaling a dynamic shift in the online dating company's trajectory.
