Contributed by: kellyseal on Friday, August 09 2024 @ 05:39 pm
Last modified on Friday, August 09 2024 @ 05:48 pm
Starboard Value has taken a stake in Match Group, the latest firm to join the company’s activist investors and criticize executives for its financial performance.
According to The Dallas Morning News, Starboard has built a 6.6 percent interest in Match Group, the parent company of dating app Tinder. The popular dating app has seen a drop in paying customers for six straight quarters, with little sign that things will turn around soon.
Starboard joins Elliott Investment Management LP and Anson Funds Management LP, two other activist investors who have demanded changes in Match Group’s operations. Starboard is planning to push for selling Match Group if it fails to turn things around, according to Dallas Morning News[*1] .
Match Group and Tinder have had numerous executive shakeups the past few years, including a new Tinder CEO, which seems to in part be driving the uncertainty.
The company’s market value is currently $8.5 billion.
Match’s stock price has also dropped almost 70 percent over the past four years because of the decline in paying users. Match Group has attempted to gain additional revenue streams for Tinder by putting coveted features like Super Likes behind a paywall and establishing a $500 per month premium VIP service, but it hasn’t been enough to lure new paying users or increase revenue.
Tinder users have not been interested in paying for features, especially ones that were previously free. Instead, they are turning to social media platforms and in-person events more and more often, looking for opportunities outside of Tinder.
Match Group has tried to address this by creating its own events, like running clubs in the U.S. and U.K., which might help boost interest in users paying for subscriptions.
According to Dallas Morning News, Starboard’s letter indicated that a lack of innovation had caused a decline in paying users at Tinder, while Hinge’s “innovative user interface” has contributed to its expansion.
Hinge has been a bright spot for Match Group as it has attracted more paying users in an overall saturated market and seen exponential growth over the past few years. Match Group continues to make it a focus of its portfolio, putting more resources into its growth.
Match Group responded to Starboard’s new demands and its other activist investors in a statement: “We are relentlessly focused on executing our key initiatives, which include: driving growth at Tinder, continuing Hinge’s impressive expansion, maintaining appropriate financial discipline, and returning capital to our shareholders.”