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Match Group Is A Clear Sell On Facebook News

May 04, 2018 8:42 AM ETMatch Group, Inc. (MTCH)META144 Comments


  • MTCH is the parent company of Tinder in which you swipe right for people you would like to meet in person.
  • Tinder has seen explosive user growth, and better yet, MTCH has been successful thus far in their efforts to monetize through subscription services.
  • After Facebook announced that they were entering the arena, however, MTCH shares have dropped 25%.
  • Because the story has changed, it is still too risky to catch this falling knife.


Shares of Match Group (NASDAQ:MTCH), the owner of the dating app Tinder have been in free fall after Facebook (FB) announced that it was entering the online dating scene. When a stock drops in value, this does not necessarily mean that the underlying fundamentals have changed. However, if the fundamental story has changed, as I believe it has, then the selloff is justified, and more downside is likely to come.

Business Overview

MTCH owns a large portfolio of dating apps, including Tinder, the number one downloaded dating app worldwide:

(Source: 2018 Investor Presentation)

MTCH has seen strong subscriber growth both domestically and internationally:

(Source: 2018 Investor Presentation)

The real growth story, as many readers may know, is in Tinder which has seen a compounded annual growth rate in subscribers of 108% since 2015:

(Source: 2018 Investor Presentation)

MTCH has thus far seen success in monetizing Tinder through its subscription service Tinder Plus, which essentially is a no-ad premium version of Tinder and also Tinder Gold, which allows users to see who likes them before they swipe.

(Source: 2018 Investor Presentation)

The growth of Tinder is unmatched (pun intended) by any other app:

(Source: 2018 Investor Presentation)

This has led to strong growth in adjusted EBITDA.

(Source: 2018 Investor Presentation)

So far, MTCH has all the makings of a secular growth story which is firing on all cylinders. What could go wrong?

The Problem: Facebook

On Wednesday, Facebook announced that they were going to enter the online dating scene, sending MTCH shares into free fall:

(Source: Yahoo Finance)

That's a 25% drop in less than two trading sessions.

While it may be tempting to just claim that Facebook could never compete with Tinder, I should note that Facebook's 2.2 billion monthly active users dwarf the 7 million subscribers seen at MTCH. Further, with

This article was written by

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Analyst’s Disclosure: I am/we are long FB. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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