Analysts from The Motley Fool are considering whether or not it’s time for investors to give up their Match Group stock.
The coverage comes a couple of weeks after parent IAC officially submitted its proposal to spin off the online dating conglomerate as a standalone business. Should the proposal be accepted by the board of directors, IAC will redistribute its 80% ownership.
Match Group’s position in the stock market dropped by just over 2% after the news was announced.
While this is a fairly common tactic – IAC has spun off several of its subsidiaries in the past after incubating them – there is some speculation that it is choosing to exit now because of Match Group’s recent legal controversies.
Ex-Match CEO Greg Blatt is counter-suing former Tinder VP Rosette Pambakian over sexual assault claims. Further, the FTC is investigating the online dating company over suggestions fake profiles and scammers were once used to entice users to sign up for premium subscriptions.
The Motley Fool believes this shouldn’t turn investors away, however, as Match Group is one of the most successful medium-sized companies in the US. It has grown by 300% over the past three years and approximately 70% during 2019.
The analysis reads: “There aren’t many companies that can claim to be at the center of a behavioral revolution, but Match Group is one of them.”
It predicts Match Group will continue to grow at a steady place, mainly led by Tinder, especially as the new generation of users turn 18 and online dating becomes more and more normalised.
Read more here.