Match Group Surges as Starboard Value Buys Stake in Online Dating Giant

Shares of Match Group (MTCH) jumped successful premarket trading Tuesday connected nan news that activist hedge fund Starboard Value has taken a important liking successful nan online making love elephantine and is already pushing for changes.

Match operates its namesake work on pinch respective different celebrated platforms including Tinder, Hinge, OkCupid, and others. Starboard has precocious purchased shares amounting to astir 6.6% of nan company, which makes nan patient nan third-largest shareholder, Starboard said successful a missive to Match activity included successful a Monday Securities and Exchange Commission (SEC) filing.

Starboard Says Match Needs to Improve Margin, Could Also Consider Sale

Starboard Value Managing Member Jeffrey Smith made a number of suggestions successful nan missive to executives, stressing that Starboard is optimistic astir Match's early and believes that nan institution is undervalued by nan market, while besides identifying imaginable areas of improvement.

Smith wrote that Match needs to amended its margins and go much profitable, arsenic he identified a way to get Match's adjusted operating margins supra 40%.

"We judge Match has an opportunity to meaningfully amended its profitability," Smith wrote successful nan letter. "Despite important gross maturation complete nan past 5 years–from astir $2 cardinal of gross successful 2019 to an expected $3.6 cardinal this year–the Company’s adjusted operating margins person declined during this time."

Smith besides suggested that nan institution should beryllium much fierce successful its stock buyback plans, returning much superior to shareholders while besides reducing its number of outstanding shares. Starboard believes location is "no amended usage of rate for Match than repurchasing its ain shares astatine this level," Smith wrote.

If Match cannot aliases chooses not to prosecute nan suggestions from Starboard, Smith wrote that Match would besides beryllium good positioned to run arsenic a backstage company, indicating that Starboard would support Match's committee if they decided to prosecute a waste of nan online making love giant.

Match shares were up much than 9% to $35.00 by 7:45 a.m. ET Tuesday, putting them connected way to retrieve overmuch of nan astir 12% successful worth they person mislaid truthful acold this twelvemonth done Monday.

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