Mike Arnold
Long only, small-cap, tech, growth at reasonable price

Is Spark Networks At An Inflection Point?

Spark Networks (NYSEMKT:LOV) owns and operates two internet dating properties, jdate.com and christianmingle.com. JDate is an annuity-like cash flow machine, generating contribution margins around 90% and requiring very little marketing spend given its enviable position ("moat") among the demographic it serves. Meanwhile, management continues to invest the JDate cash flow in its growth platform, christianmingle.com.

I do have to admit, on the surface, the subscriber growth trends in Christian Mingle do not instill my animal spirits. While subscribers are up meaningfully year/year (~24,000), Christian Mingle lost around five thousand subscribers sequentially.

(Source: 2013 earnings release)

Is there a reason for lack of subscriber growth at Christian Mingle?Management provided a bit of good insight on the call, which...

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