Starboard pushes for changes at Tinder-parent Match after building 6.6% stake
Adds background in paragraph 2, details from Starboard letter in paragraphs 3-5
July 16 (Reuters) -Starboard Value has built a 6.6% stake in Match Group MTCH.O and is urging the dating app operator to explore a sale if it is unable to revitalize its business, the activist investor said.
The move deepens pressure on Match after another activist investor, Elliott, also pushed for changes at the company earlier this year due to slowing growth after the pandemic and a lack of new features for its key apps including Tinder.
Match should improve its margins by cutting costs and be more aggressive with share buybacks in the near term, Starboard Managing Member Jeffrey Smith said in a letter on Monday.
He added the company has not capitalized on its "enviable market position" and that its share price has underperformed the market due to issues including lack of innovation at Tinder.
"If performance fails to improve, we believe changes must be considered, which should include a thoughtful examination of whether Match's best path forward would be as a private company," Smith said.
The company's shares were up 8% in premarket trading on Tuesday. They have declined about 12% this year and have been on a losing streak since 2021 as it faces stiff competition from rivals including Bumble BMBL.O and struggles to hold on to paying customers in an uncertain economic environment.
Match continues to remain focused on Tinder's growth and Hinge's expansion, a spokesperson said in an emailed statement, adding the company would "look forward to continuing our open dialogue with all of our investors, including Starboard."
Elliott's push for changes earlier this year had led to Match naming Instacart executive Laura Jones and Zillow co-founder Spencer Rascoff to its board in March.
Investment firm Anson Funds Management had also amassed a stake and was pushing Match to refresh its board, Bloomberg News reported in March.
The Wall Street Journal first reported on the Starboard development on Monday.
Reporting by Urvi Dugar and Jaspreet Singh in Bengaluru, Additional reporting by Kanjyik Ghosh and Shreya Biswas; Editing by Alan Barona and Shounak Dasgupta
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