A Seeking Alpha analyst has recommended that investors purchase Momo stock following the Chinese firm’s acquisition of Tantan.
Momo stock has been turbulent over the past year, with concerns about the Chinese government and stagnant user numbers reducing its value.
“The acquisition of Tantan is a gamechanger.” the article argues, “The Chinese Tinder fits perfectly into Momo’s product range and will leverage the other sub brands.”
The move helps to make Momo the market leader in Chinese online dating by far, hosting about 3X the amount of users of Tinder.
As well as taking on Tantan, Momo has managed to increase its user engagement with the rollout of a new algorithm.
It has reportedly had the impact of increasing the number of interactions on the platform by over 20% between September and December.
The site is said to be diversifying, opening up its radio channels for example, but not at the expense of its core video streaming revenue model.
The proactive approach of management to tackling Momo’s problems is something that bodes well for the future, it is noted.
Even after increasing in value following the Tantan deal, the analyst feels the stock is still cheap in the long term.
“The market gives and takes, but this certainly is a gift. I have accepted it with both hands”, reads the conclusion.
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