US Markets
Tuesday, January 9th, 2024 3:05 pm EDT
Key Points
- Elliott Management’s Significant Stake and Market Reaction: The primary focus of the article is the substantial increase in Match Group’s shares, the owner of Tinder, spurred by the news that activist investment firm Elliott Management had amassed a nearly $1 billion stake in the online dating company. The shares surged by up to 12% in Tuesday morning trading, subsequently stabilizing around a 6% increase after the opening bell. This indicates a strong market response to Elliott Management’s involvement in Match Group.
- Match Group’s Financial Challenges and Analyst Sentiment: The article highlights Match Group’s financial challenges, particularly its struggle in recent quarters after experiencing explosive growth in the early days of the pandemic. Despite having a market cap of $10 billion at the close on Monday, the figure is noted to be significantly lower than its more than $45 billion market cap in 2021. The company’s reported decline in “Tinder payers” in November’s third-quarter earnings and a fourth-quarter revenue outlook that missed expectations are mentioned as contributing factors. However, some Wall Street analysts remain optimistic about Match, with JPMorgan naming the stock a top pick in December, emphasizing a projected return to double-digit percentage growth in Tinder among other factors.
- Elliott Management’s Engagement and Success in Campaigns: The article outlines Elliott Management’s expected engagement with Match Group’s management, citing sources. It remains unclear whether this engagement will involve nominating its own directors. The piece underscores Elliott Management’s track record of success in activist campaigns, citing its involvement in companies like Salesforce and Pinterest. Additionally, the article mentions other instances where Elliott has engaged with companies, such as Crown Castle and Phillips 66, showcasing the investor’s history of influencing management decisions and seeking changes in board composition. Jesse Cohn, the managing partner at Elliott Management, is highlighted as a key figure who has led many of the firm’s recent engagements and has held board seats at companies like Citrix, eBay, and Twitter.
Shares of Match Group, the company behind Tinder and other online dating platforms, surged by as much as 12% in Tuesday morning trading following reports that Elliott Management, an activist investing firm known for campaigns at companies like Salesforce and Pinterest, had acquired a roughly $1 billion stake in the dating company. The stock later stabilized with a 6% increase after the opening bell. Match Group, which also owns Match.com, has faced challenges in recent quarters after experiencing explosive growth in the early days of the pandemic. Despite having a market cap of $10 billion at the close on Monday, this figure is significantly lower than its more than $45 billion market cap in 2021.
Elliott Management is expected to engage with Match Group’s management, according to sources, although it remains unclear whether this involvement will extend to nominating its own directors. Some analysts on Wall Street remain optimistic about Match, with JPMorgan naming the stock a top pick in December, citing a projected return to double-digit percentage growth in Tinder, among other factors. However, Match reported a decline in “Tinder payers” in November’s third-quarter earnings, and its fourth-quarter revenue outlook fell short of expectations.
The company has also experienced instability in its leadership, with seven different CEOs since 2012, a turnover rate significantly higher than the average CEO tenure of seven years. Elliott Management, led by Jesse Cohn, a managing partner with a history of successful engagements, has been involved in campaigns at various companies, including Crown Castle, where it influenced the removal of the wireless-infrastructure company’s CEO, and Phillips 66, where it plans to seek two board seats. Cohn, who has held board seats at Citrix, eBay, and Twitter, has been a key figure in Elliott’s recent activities. As of now, representatives for Match and Elliott Management have not provided immediate comments on the situation.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/09/activist-investor-elliott-reportedly-takes-1-billion-stake-in-match.html
