Tinder owner match attracts Elliott Investment

The activist built a roughly $1 billion position at Match, the parent company of dating platforms such as Tinder and Hinge, according to people familiar with the matter.

Elliott plans to talk to Match about ways to turn things around. He did not know the hedge fund’s specific demands or whether it plans to nominate board members.

Match stock closed Monday at $37.89, giving the company a market capitalization of about $10 billion. In 2021, amid the coronavirus pandemic and the boom in internet stocks, Match’s market capitalization rose to well over $40 billion. Recently, a decline in paying customers and other factors have negatively impacted the stock price.

In addition to Tinder and Hinge, Dallas-based Match’s portfolio of dating platforms includes OkCupid and Plenty of Fish, in addition to its eponymous Match brand. New York media and internet holding company IAC/InterActive previously owned Match, but separated it completely in 2020.

The business is priced far below publicly traded rivals such as Bumble, which has a market capitalization of about $2 billion, and Grindr, which has a market capitalization of about $1.5 billion.

Match’s Tinder app, the world’s largest dating site by users, had revenue of approximately $1.8 billion in 2022, an increase of 9% from 2021. Revenue at Hinge, the fastest growing platform, surged 44% year over year.

In recent days, analysts and investors have expressed concern that Tinder’s growth is slowing faster and more severely than expected. Match also continues to experience executive turnover, causing concern among some shareholders.

Mutch recently named former Zynga CEO Bernard Kim as CEO for 2022. Kim also oversees Tinder operations, according to the company’s website.

In November, Match reported third-quarter results that showed the number of “payers” on the Tinder app continued to decline. The company further predicted that it expects this decline to worsen further this quarter as Match feels the impact. Price increases began to take effect in early 2023.

However, the company said the slowdown was a short-term impact in its broader restructuring plan. Meanwhile, analysts predict that revenue from the company’s hinge business will reach $1 billion over the next four years.

Mr. Elliott is known for taking on high-tech companies and forcing them to change, including in sales. One of his biggest and busiest activists, the company has recently promoted campaigns at companies like his Salesforce and Pinterest. The latter two recently announced plans for a new CEO.

Elliott also recently won against Crown Castle, which owns wireless base stations. In late December, Crown Castle announced a review of its fiber business and replaced two directors on its board as part of a deal with hedge funds that had been pushing for change.

Email Lauren Thomas at lauren.thomas@wsj.com.