Tinder owner Match surges after hedge fund builds up $1bn stake

SHARES in the parent company of dating app Tinder surged yesterday after it was revealed that US hedge fund Elliott Management had built up a stake worth as much as $1bn (£790m).

News of the fund’s holding sent shares in New York-listed Match Group up as much as 11pc, before paring back gains to 3pc in later trading. Match has been grappling with a languishing share price after its stock slumped from a high point during the pandemic.

A spokesman for the group, which owns Match.com, Tinder, Okcupid and Hinge, said: “Our team regularly engages with investors, and will continue to work to create great experiences for our users and value for our shareholders.”

Dating app companies have been grappling with a slowdown in growth after enticing a generation of singles to swipe left and right. The market for dating has become saturated with “freemium” apps all trying to convince users to pay for extra features.

Launched in 2012, Tinder has been downloaded more than 530m times, but its total user numbers dropped by 6pc year-on-year, according to the company’s latest results, falling to 10.4m.

In its last quarterly results, Match admitted that the number of paying subscribers across its apps fell by around 5pc, down by 836,000.

The company has been forced to cut its revenue expectations.

It has launched premium-priced versions of the app in an effort to boost revenues, including a $500-per-month (£390) tier that promises subscribers access to the “absolute best of Tinder”.

Dating apps have also struggled to attract “Gen Z” users. A study by news website Axios found 79pc of US college students reported using dating apps less than once per month.

Match’s stock has sunk 75pc since the summer of 2021 after a pandemic-fuelled boom for digital stocks faded and people were no longer stuck at home on their smartphones.

The company’s market cap as of yesterday was around $10.7bn. The Wall Street Journal, which first disclosed Elliott’s interest in Match, reported that it was not yet clear what strategy the hedge fund would pursue to boost returns for investors.

In the past, Elliott has often called for major changes in strategy, carve-ups, or demanded boardroom representation.

Shares in rival Bumble, which owns the female-focused dating app, also rose 4pc on Tuesday. Its stock is down more than 80pc since it went public in 2021.

Led by US billionaire Paul Singer, Elliott has gained a reputation for its relentless activist campaigns, at one time forcing Argentina to pay more than $2bn after the country defaulted on its debt. The legal battle took nearly 15 years.

The fund has recently targeted technology companies, many of which have seen their shares slump since the pandemic and been grappling with cutting jobs. It has previously built stakes in payments business Paypal and customer service software giant Salesforce.

Elliott did not respond to a request for comment.