(BFM Stock Exchange) – Match Group has lost more than 80% of its stock market value in three and a half years, penalized by a decrease of its paid users and by a certain lack of innovation. The specialist in meeting applications is focusing on artificial intelligence and new features to seduce women again and boost its growth. Otherwise, an exit from the scholarship will probably be favored by activist investors in its capital.

Perhaps you took advantage of Valentine’s Day on Friday evening to spend the evening with your partner? In any case, we hope that your sentimental life is much better than the relationship between Match Group and Wall Street. The parent company of Tinder, Hinge and Okcupid dating applications, has formerly experienced an idyll with investors.

At its scholarship zenith, at the end of 2021, the company had a market capitalization (the value of all of its stock market shares) of nearly $ 50 billion, much higher than that of CAC 40 groups in a little more Three years, romance has somewhat turned into vinegar.

Match Group saw its course be divided by almost six and its market capitalization fell to only $ 8.5 billion. Introduced on the stock market in early 2021, the big rival Bumble (another meeting application) experienced a similar trajectory, with a capitalization past from 11 billion to $ 1.3 billion in three and a half years.

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A basant user base that melts

Like other companies, (Snap Inc, the parent company of Snapchat, or Pinterest), Match had seen its activity and its market valuation being catapulted during the pandemic. The end of the health crisis and the return to more traditional and above all less virtual social interactions have undermined the group on the stock market.

Analysts also pointed out a certain major lack of innovation at Tinder, reports the Wall Street Journal.

Match Group has also not escaped two recent phenomena. First, the strong inflation which has been observed in many countries in recent years has led households to put the sweet pedal on discretionary expenses, such as paying subscriptions to meeting applications.

Second, these same applications no longer necessarily have the rating as well as before, in particular with a strategic category for their successes: women. As the Financial Times pointed out last year, women are often in the minority on dating platforms (the British daily newspaper evokes on the basis of OFCOM figures a 39% -61% ratio on Tinder and 41% -59% on Bumble) and find themselves sugentity. Not to say sometimes attacked.

“Trying to attract young women is the biggest challenge for meeting applications,” the Financial Times Rebecca McGrath, associate director for the media and technology at Mintl, told Financial. “The important imbalance between the sexes means that it is more difficult for men to find partners and, therefore, women are often bombed, which makes experience even more difficult for everyone,” added She.

Ultimately, the base of paid user of match Group is growing more and more. Last year the turnover, certainly increased by 3%. But this progression can be explained by tariff increases. The number of paid users fell by 5% (with a drop of 7% for Tinder), to 14.9 million, after having already decreased by 5% in 2023 and 1% in 2022.

Activist investors smell the right blow

Operating match difficulties have recently attracted so -called activists. These investors tend to target companies that have certain problems (governance, strategy, execution, etc.). The Wall Street Journal had revealed in January 2024, that Elliott Capital, known for having met iron with Argentina in particular, had taken a position representing $ 1 billion. Anson Fund Management followed in March, according to Bloomberg. Then last summer it was the turn of Starboard Value.

Last week, the Director General of Match Group, Bernard Kim, resigned, replaced by Spencer Rascoff, co-founder and ex-director general of Zillow, a kind of American version of Leboncoin.fr. Guest of BFM Business last week, Charles Monot, president of Monocle Asset Management, saw it as a strong decision on the part of activist funds. “They had already said two-three times that if the results do not move they were going to act. They acted by changing the CEO (the director general, editor’s note) and by appointing a man,” he explained.

If Match Group is therefore experiencing difficulties and turmoil, the company is not without assets. In essence, activist investors do not take initiatives in without potential files.

“With a little hindsight, Match fulfills many conditions for investors: it is a market leader in a category which, until recently, did not seem to be close to complete digital penetration, it displays very margins Attractive, is not very capital and, therefore, the company produces a converting results into high cash flows and has a significant capacity to return from cash to shareholders, “said Deutsche Bank last July. “Not to spoil anything, Match also has the most rapid, Hinge growth in the main public meeting, added the German establishment.

Starboard Value does not say anything else. In a letter addressed to the match board of directors, the activist investor mentioned in July “a growing, high quality company which is deeply undervalued”.

The fund considered that a large part of Tinder’s problems was linked to a lack of “product innovation”. However, it deplored that the margins of the company have sagged despite the growth of income and judged that the company should be able to reach an adjusted operational margin of more than 40% (compared to 36% in 2024).

Starboard underlined in passing how much the company evolves to depressed courses, with a market capitalization which represents less than 10 times the cash flow generated in 2024 (882 million dollars). It is almost half less than the median of a basket of comparable “tech” groups, noted the fund.

AI to relaunch the flame

But low valuation without catalyst is not enough. Match Group must therefore straighten the operational, as the activist funds wish. The company has, in this perspective, held its first “Investor Day” last December (day dedicated to investors) since its IPO. This allowed him to expose his reconquest strategy.

The company plans to improve the user experience strongly and intends to bet – not surprisingly – on artificial intelligence (AI). Match has notably highlighted a tool (integrated in Hinge) called “AI Photo Finder”, a feature that helps the user to determine which profile photo is most likely to hit their applications. The AI ​​must also make it possible to better understand the user profiles so as to increase the rate of “quality matches”.

Faye Iosotaluno, the director general of Tinder, more particularly presented a plan on this occasion “to rekindle the flame” of the growth of the flagship application of the company. Among the initiatives on display, Tinder tests a new biometric “lives that aims to fight against false accounts and false information. And therefore improve safety. Faye Iosotalano explained that the initial test phase had produced promising results. For the same purpose, the group tests the obligation to submit on the application of face photos to identify.

“Double Date” and “Coach” in seduction

The company also intends to improve “the result for users”, in particular for women for whom this point is “critical”, explained Faye Iosotaluno. Improved artificial intelligence must thus allow, by the second half of 2025, to improve the recommendations to users. The manager cited the example of a user who likes outdoor activities, such as hiking. The AI ​​can suggest a profile which, of course, does not mention the hike properly speaking, but likes nature and got a passion for kayak.

Tinder also tests a functionality that identifies accounts with common friends. According to Faye Iosotaluno, users are more likely to appreciate a suggested profile if it presents friends in common, especially women (even if it depends on the countries). Another initiative to put “fun” at the heart of its reactor, and again to improve the experience for women, Tinder intends to launch a feature allowing “double date”, with two pairs of friends who have a common meeting .

With these initiatives, Tinder intends to influence the (bad) trend. The Company was counting on a slight decrease in its income in 2025, before stabilization in 2026 and then a return to growth in 2027.

More dynamic than Tinder, Hinge will also resort to AI, especially for “the intelligent matching” as well as to “coach” users not very gifted in their conversations with their interlocutors. Measures that must help this youngest application reach $ 1 billion in revenue in 2027, compared to 550 million in 2024.

More transversely, Match Group intends to increase its presence in Asia (excluding China) which represents a market of 260 million singles for a low digitization rate (7%).

Towards an outing on the side?

Ultimately, Match aims for growth of 4% to 6% per year over the period 2024-2027 and an adjusted operating margin of 39% in 2027.

These promises will obviously be scrutinized by investors. “For the first time for a long time, they have defined targets,” said Marc Regenbaum, portfolio manager at Neuberger Berman Investment Advisers, quoted by the Wall Street Journal. “Now, it’s undeniably their own to make them.” He added.

In the absence of operational recovery in the medium term, the days on the Group match stock market would probably be counted. Activist investors would certainly push for an outing on the side. This is notably the scenario of Shweta Khajuria, analyst at Wolfe Research, quoted by Bloomberg.

“It is a business that can attract the funds of Private Equity (investment capital) because it generates regular cash flow”, explains Charles Monot on this point.

Starboard Value did not hide it. “If the performances do not improve, we believe that changes must be considered, which should include an in -depth examination of the question of whether the best way to follow for match would be that of an unlisted company on the stock market” wrote the activist investor in July.

The “I love you” relationship “of Match Group with the market would then end with a divorce.