Analysts Look to Match and IAC Future Following Spin Decision

A range of analysts have weighed in on the future of Match Group and IAC following the latter’s proposal to spin the former

The suggested move, submitted to the Match Group board late last week, would see the full separation of Tinder’s parent from IAC.

One Seeking Alpha analyst, writing under the moniker ‘Plain Vanilla’, argues that Match can look forward to high growth in the months following the spin. Recent acquisition Harmonica “provides a new way to serve 33 countries in Asia that are predominantly Muslim”, according to the commentary. 

The author celebrates the freemium model used by Match brands, comparing it to LinkedIn (which was acquired by Microsoft in 2016 for $26.2 billion). LinkedIn Premium and Tinder Gold both allow consumers to see who has viewed their profile. analyst Dave Royse writes elsewhere that the spin should benefit IAC. The deal sees Match Group take control of certain IAC liabilities, freeing up resources going forward.

By some estimates, the firm’s net cash position could increase from $1.35 billion to around $3 billion.

Coverage in Investor’s Business Daily makes the case that the new debt load could pose a challenge to Match.

The piece highlights a counterpoint from Jefferies analyst Brent Thill, however: “Looking forward, we believe Match will be better off once it gets through this noise. 

“Liquidity improves and Match will finally be able to start stockpiling cash without worrying about big brother robbing the piggy bank.”

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