Match Group Inc (NASDAQ:MTCH) (read: Tinder) on the Rocks


Shares of Match Group Inc (NASDAQ:MTCH), the global leader in dating famed for its Tinder dating app, plunged 12.09% Wednesday after the company declared a revenue miss but beat on earnings.

Match closed at $15.70 Wednesday after trading 6.3 million shares, over five times its average volume of 1.21 million.

Technically, the stock has fallen outside its rising trend channel that has been effective since February 2016, and simultaneously violated its 50-day moving average. However, it is still well above its 200-day moving average at $14.00. The fall may therefore be an overdue correction that could meet support around that line.

Match Group Inc (NASDAQ:MTCH) disappoints on revenue

For the third quarter, the company declared EPS of $0.23 which beat by $0.03, and total revenue of $316.44 million which missed by $1.47 million, though it grew 17.6% year on year.

“Q3 was another strong quarter for Match Group,” said Greg Blatt, Chairman and CEO in a statement. “We grew revenue 22% and expanded margins in our Dating businesses, delivering results ahead of expectations, driven by great growth at Tinder, as well as PlentyOfFish and Meetic. Our Non-dating business turned a meaningful profit this quarter as expected, and overall, we are meeting or exceeding the marks we have set for ourselves. The outlook for our Dating businesses remains very positive.”

Match reported a net profit of $56.4 million compared to $35.3 million in the year ago period.

In one important statistic, the number of paid subscribers jumped 31% to 5.5 million, the rise being fueled chiefly by Tinder.

For the nine months ended this quarter, operating cash flow increased 34% to $169 million compared to the prior year period, while free cash flow increased 22% to $130 million. The company carried $231 million of cash and cash equivalents as at September 30, 2016.

So why did the stock fall?

It is likely that smart money booked profits after the strident rise in the stock.

From $9.82 in February Match raced up to touch a high of $19.74 last week, reason enough for investors to consider a break up.


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