Niche online dating operator Spark Networks has suffered a significant drop in shares on Wall Street.
On 6th March, Spark Networks saw a 19% drop in shares to $4.66, the fifth biggest percentage drop on Wall Street that day.
This fall in fortunes come as Spark Networks predicted a tough 2014 for ChristianMingle and JDate.
Their fourth quarter revenue rose 6% to $17.2m and their yearly losses shrank to $3.5m, down from $10.5 million in 2012.
CEO Greg Liberman linked Spark Networks’ recent performance with first timers in the dating pool who let their paid subscriptions lapse in the third and fourth quarters, saying: “The more subscriptions to lapse in any period, the more first time subscribers and win backs we need to add to replace them just to maintain our subscriber base.”
Investors are unhappy, having seen shares drop 50% from a May 2013 peak of $9.25.
California-based hedge-fund Osmium – who own 14% of the company – have been calling for new management, including putting their founder John Lewis on the board.
Spark CEO Liberman responded to this with a letter, which said: “The company strongly believes it is not in the best interests of the company or its stockholders to turn control of the company over to a single stockholder holding less than 15% of the company’s stock; a stockholder who has failed to articulate any concrete suggestions for changes in strategy or offer the other stockholders a premium for assuming control.”
An article by Sarah Pringle on The Deal recently hinted at the possibility of a takeover by Match Group, the only competitor who could afford the company, and who Spark were rumoured to have had talks with, back in 2008.
This morning, Spark announced the addition of two new board members, David Hughes, CEO of The Search Agency, and Vince Thompson, Managing Partner of Middleshift Consulting.