Match Group Stock Take a Hit as Company Misses Revenue Goals 

Match Group
  • Thursday, November 14 2019 @ 03:14 pm
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Shares of Match Group fell 15 percent after the company announced it will miss revenue goals for the fourth quarter. Shares of IAC also fell by 11 percent, according to Reuters.

The company expects fourth quarter revenue to be between $545 and $555 million, short of the $559.3 million goal according to IBES data from Refinitiv.

This news comes on the heels of a complaint filed by the U.S. Federal Trading Commission that Match Group offered fake profiles to entice customers to purchase paid subscriptions to its services, among other “deceptive and unfair practices,” as said in the lawsuit. Match Group is also facing legal entanglements with former Tinder employees, including founder Sean Rad, who said the company cheated him out of rightful payment after undervaluing his stock options.

This news also comes alongside some new competition in a crowded dating app market. Facebook Dating recently debuted its services, and Match Group is also facing competition from female-friendly dating app Bumble with its recent launch in India, a territory seen as potentially a huge growth market for dating app services.

Match Group has been making bold moves in recent years by acquiring popular dating apps like Hinge, Plenty of Fish, OkCupid and Tinder and has spent significant marketing dollars on positioning them to appeal to different consumer markets. For example, Hinge has doubled down on being an app for more serious daters through its video campaign “designed to be deleted,” while OkCupid has positioned itself as the app for more socially progressive consumers with a national billboard marketing campaign.

Tinder meanwhile, is appealing to younger daters who might never have tried a dating app before, and who are more comfortable communicating online. Tinder recently launched a new interactive original series called “Swipe Night” which was a big hit among this demographic, and the company plans to take it international in 2020.

Reuters reported that Tinder added 437,000 subscribers in the third quarter, bringing total subscribers up to 5.7 million. This is down from 503,000 additional subscribers in the second quarter. But regardless, Tinder remains a bright spot for the company with continued growth quarter over quarter.

Match Group has spent a lot of money on marketing and its expansion into developing markets, specifically in Asia. Their total operating expenses rose 20 percent to $364.9 million in the third quarter, which has paid off. The company had a better-than-expected revenue for the third quarter, and a 19 percent growth in average subscribers across all its apps to 9.6 million, which includes an increase of about 29% in international markets.

The company faces challenges ahead, but maintains its strong position in the industry.