Starboard Value Pushes for Change at Match Group: Can the Dating Giant Find Its Groove Again?
The online dating giant, Match Group (MTCH), is facing pressure from activist investor Starboard Value, who is urging the company to make significant changes to its operations and financial strategy. Starboard, known for its successful track record of boosting shareholder value, has taken a 6.64% stake in Match and is calling for a renewed focus on operational efficiency, margin improvement, and capital allocation, including potentially taking the company private. This move comes amidst a period of slowing revenue growth and relatively poor stock performance for Match, raising the question: can the dating giant rediscover its winning formula?
Key Takeaways
- Activist pressure: Starboard Value has launched a public campaign targeting Match Group, highlighting opportunities for improvement in operations, financial results, and capital allocation.
- Operational focus: Starboard seeks to optimize Tinder, Match’s most valuable asset, through product innovation, cost reduction, and improved margins.
- Capital return emphasis: Starboard urges Match to implement an aggressive share repurchase program, believing the stock is undervalued and presents a compelling opportunity for capital deployment.
- Potential for privatization: If operational improvements fail to materialize, Starboard suggests exploring a sale of the company, believing its valuable assets might be better suited as a private entity.
- Multiple activist campaigns: This is not the first time Match has attracted activist attention. While Elliott Management and Anson Funds have already secured board seats, Starboard’s experience and the depth of its campaign make it a formidable force.
Starboard’s Plan for Match: From Operational Improvement to Privatization
Starboard’s campaign is not merely about selling Match. The firm’s initial focus is on improving the company’s operational performance by addressing its slowing revenue growth and excessive spending. Starboard argues that while there is nothing inherently wrong with increased spending, Match’s investments in customer acquisition and product development have not translated into the desired growth.
The firm believes that CEO Bernard Kim, with his experience in the gaming sector and previous role as interim CEO of Tinder, could
