MTCH

Match Group($MTCH) CEO Purchases $2 Million in Shares After 10% Stock Plunge—Second Major Investment Within Three Months

05/12/2025 15:33

Match Group ($MTCH) CEO Spencer Rascoff has purchased approximately $2 million worth of company stock on May 9, acquiring 70,885 shares at an average price of $28.21 per share. This transaction comes at a time when the online dating company's stock has experienced a significant decline. This marks Rascoff's second major purchase in just three months, following his initial acquisition of 59,560 shares at $34.41 per share (approximately $2.05 million) on February 6, shortly after his appointment as CEO. On the same day in February, director Glenn Schiffman also purchased 3,000 shares for about $103,409. In contrast, president Gary Swidler sold 242,209 shares at $33.10 for approximately $8.02 million on March 7. Rascoff's latest purchase occurred immediately after Match Group's stock plummeted 10.5% following its May 8 first-quarter earnings report, which revealed a 5% decline in paying users, deepening investor concerns. The stock fell from $30.38 to $27.18 after the announcement. Match Group, a mid-cap company with a market capitalization of approximately $7.3 billion, operates several globally recognized dating platforms including Tinder, Hinge, Match.com, and OkCupid. However, the company has been struggling with post-pandemic growth slowdown, with its stock plummeting roughly 64% over the past five years. In the first quarter of 2025, Match Group reported revenue of $831.18 million, representing a 3.3% year-over-year decline. Notably, revenue from Tinder, the company's flagship service, decreased by 7.1% to $447.40 million, significantly impacting overall performance. On a positive note, Hinge continues to show steady growth, providing a bright spot for the company. The appointment of Spencer Rascoff as the new CEO in early February marked a pivotal shift, acknowledging the need for transformation. Rascoff, a co-founder of Zillow and Hotwire, brings substantial experience from the technology sector. Upon his appointment, he emphasized the need for "innovative approaches to reignite growth." Recently, Match Group announced a restructuring plan that includes a 13% workforce reduction to cut costs and improve efficiency. This follows a previous 6% workforce reduction announced in July 2024. Additionally, the company initiated its first quarterly dividend in December last year, currently yielding 2.80%. Meanwhile, Match Group has been under pressure from multiple activist investors. Elliott Investment Management and Starboard Value have acquired significant stakes, while Anson Funds recently engaged in a dispute over board composition. On April 29, Match Group resolved its dispute with Anson Funds and appointed Kelly Campbell as a new director. Competitor Bumble faces similar challenges, with its stock dropping 28% after announcing weak first-quarter guidance on February 19 and experiencing executive changes, including the return of founder Whitney Wolfe Herd as CEO. This suggests the broader online dating industry is grappling with slowing growth and profitability pressures. Match Group currently trades at a P/E ratio of 13.88, below industry averages. Analysts project Match Group's revenue to grow at an average annual rate of 4.2% over the next three years, significantly below the 10% projected growth for the broader Interactive Media and Services industry. Wall Street analysts maintain a cautious stance on Match Group, with an average price target of $34.32 and mostly "hold" ratings. In December, Jefferies downgraded its rating to "hold" citing weak monthly active user trends for Tinder. CEO Rascoff's recent stock purchase sends a strong signal of his confidence that the current stock price undervalues the company. Particularly, the May 9 price of $27.18 was near its 52-week low, suggesting strategic timing for his purchase. Insider buying typically signals positive long-term outlook for a company. However, President Swidler's substantial sale in March suggests possible differences in outlook among executives. These contrasting insider trading patterns send mixed signals to investors. Match Group's future success will largely depend on its ability to reverse Tinder's declining paying user trend and maintain Hinge's growth momentum. Additionally, improving AI-based matching algorithms, marketing strategies to capture younger users, and developing new revenue models remain critical challenges. In conclusion, CEO Rascoff's consecutive substantial stock purchases indicate his significant confidence in Match Group's long-term value and recovery potential. Investors should monitor upcoming quarterly results and management's strategy execution to determine whether Match Group can maintain its leadership position in the online dating market.

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