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Bernard Kim of Match Group Purchases $1 Million Worth of Shares – Insider Weekends

  • June 4, 2023

Match Group (MTCH) appears to be looking for a stable relationship with the market but has instead been experiencing a roller coaster ride. The company specializes in dating platforms, and its portfolio of brands includes well known platforms such as Tinder, Hinge, OkCupid, Match, and more. Among investors, the Match Group is well known for its successful separation from IAC Inc. (IAC) – especially when compared to other, less successful, IAC spinoffs, such as the video hosting and sharing platform Vimeo (VMEO), which lost over 90% of its value since the spinoff. After the initial enthusiasm wore off, the company has seen its stock price decline by over 50% in the last year.

We’ve discussed the Match Group in the past, mostly in conjunction with another dating platform, Bumble (BMBL), which has also seen a similar decline of 49% in the last year, and a drop of over 75% since the company when public. After Bumble’s IPO and subsequent insider purchases, we wrote the following in a February 2021 Insider Weekends post,

Ms. Herd was an executive at Tinder, which she joined in 2012 when it was still being incubated inside IAC.  She left Tinder in 2014 and founded Bumble. Tinder is now a part of Match Group (MTCH), which includes numerous dating related properties including Match, OkCupid, PlentyOfFish, etc.

The meteoric rise of Match Group over the last year and especially after its complete spin-off from IAC generated a lot of interest in Bumble during its IPO. After revising its IPO price upwards, the stock debuted at $43 on February 11th and hit an intraday high of $79.60 before settling down to close at $70.55. The company consists of the Bumble dating app with 12.3 million monthly active users (MAU) and a dating focused social networking platform called Badoo with 24.3 million MAU. Bumble has a “first mover advantage”, where it quite literally allows women on the platform to make the first move to contact a potential date.

Bumble Company Timeline
Bumble Company Timeline (source: S1 Filing)

Most of the growth is currently coming from the Bumble app which saw paid users grow 49% in 2019 and 30% in the first nine months of 2020. Including the slower growing Badoo, brought down the overall growth rate for 202o to 19%. I was quite surprised by the performance of Match Group during this pandemic when people tended to stay away from family and friends, let alone strangers. While Match Group did not reveal its year-to-date subscriber growth numbers when reporting Q3 results, they grew revenue 18% to $640 million and net income by 14% to $200 million in Q3 2020. Revenue for the nine months ended September 30, 2020 was  $1.74 billion for Match Group (16% growth YoY) and $417 million for Bumble.

Yet, unfortunately, it seems as though the growth for both the Match Group and Bumble was largely unsustainable. While Tinder still remains the most popular and most downloaded dating app, and total revenue is still growing, the rate of growth is slowing.

For fiscal 2022, total revenue grew by 7% YoY well below revenue growth in fiscal 2021, which was a healthy 25%. Operating income on the other hand declined by 40% YoY to $515 million. As for the recently released Q1 2023 results, total revenue declined by 1% QoQ to $787 million and operating income also declined by 5% to $198 million.

Furthermore, overall payers (unique users in a given month from which the company earned direct revenue) declined from 16.3 million in Q1 2022 to 15.9 million in Q1 2023. A possible positive to all this is that revenue from Hinge (one of the Match Group’s newer dating platforms) increased by 27% when compared to the prior-year quarter.

Revenue and Operating Income Changes for the Match Group
Revenue and Operating Income Changes for the Match Group

Something interesting to note is that when Q1 results were announced on May 2 of this year, it was also announced that the Board of Directors of the Match Group approved a new share repurchase authorization of $1 billion to replace the previous buyback authorization that had completed by the end of Q1 2023. This buyback announcement is in line with the company’s plans to return at least half of free cash flow (which they expect to be around $800 million this year) to shareholders, with the rest of free cash flow being used to drive organic growth and strengthen the balance sheet.

This week’s insider purchase came from the Match Group’s CEO, Bernard Kim. Mr. Kim is a relatively new CEO, only having been with the company since May 31, 2022, after the previous CEO, Sharmistha Dubey resigned. Prior to joining the Match Group, Mr. Kim was the President of the social video game company Zynga. Mr. Kim happens to be the only insider to purchase shares of the Match Group since the company was spun-out from IAC, and his first purchase was in August 2022 when the stock was trading at around $65 per share.

On the one-year anniversary of his joining the company, Mr. Kim purchased around $1 million worth of shares at a price of roughly $35. While we do often view insider purchases in a more positive light, the fact that Mr. Kim remains the only insider to purchase shares – and purchased the shares very specifically on his one year anniversary of joining the company, seems almost like a signal for the market.

While the buyback announced is definitely a good sign for shareholders, it simply isn’t enough to overcome the stalled growth. The P/E ratio for the Match Group in the trailing twelve months is very rich at 37. Forward P/E is expected to be a 19.67 and appears to be reasonable for a company growing revenue by 7% a year. Margins are fairly attractive, yet declining operating income is concerning. Overall, the Match Group has a unique group of brands with a sustainable business but I find it hard to get excited about the company until we see a sustained double digit increase in revenue.

Welcome to edition 685 of Insider Weekends. Insider buying decreased significantly last week with insiders purchasing $63.86 million of stock compared to $125.83 million in the week prior. Selling also decreased to $835.36 million compared to $1.02 billion in the week prior.

Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by the total insider purchases that week. The adjusted ratio for last week went up to 13.08. In other words, insiders sold more than 13 times as much stock as they purchased. This week, the Sell/Buy ratio was unfavorable, compared to the prior week when the ratio stood at 8.13.

Notable Insider Buys:

1. Loews Corporation (L): $58.02

Sr. VP, Corp Dev and Strategy Benjamin J. Tisch acquired 330,000 shares of this diversified holding company, paying $56.91 per share for a total amount of $18.78 million. Mr. Tisch increased his stake by 1624.82% to 350,310 shares with this purchase.

You can view the list of recent insider transactions for Loews Corporation here.

P/E: 12.59Forward P/E: 20.01Industry P/E: 9.24
P/S: 0.92Price/Book: 0.91EV/EBITDA: 8.13
Market Cap: $13.22BAvg. Daily Volume: 870,92852 Week Range: $49.36 – $65.52

2. Diversified Healthcare Trust (DHC): $1.69

Director Adam D. Portnoy acquired 3,154,641 shares of this diversified holding company, paying $1.38 per share for a total amount of $4.34 million. These shares were purchased indirectly by a trust.

You can view the list of recent insider transactions for Diversified Healthcare Trust here.

P/E: N/AForward P/E: N/AIndustry P/E: 26.33
P/S: 0.31Price/Book: 0.16EV/EBITDA: 17.22
Market Cap: $405.06MAvg. Daily Volume: 3,966,17452 Week Range: $0.61 – $2.15

3. Align Technology, Inc. (ALGN): $302

Director Kevin J. Dallas acquired 7,000 shares of this dental devices company, paying $285.26 per share for a total amount of $1.99 million. Mr. Dallas increased his stake by 133.43% to 12,246 shares with this purchase.

You can view the list of recent insider transactions for Align Technology, Inc. here.

P/E: 71.06Forward P/E: 30.32Industry P/E: 26.36
P/S: 6.24Price/Book: 6.64EV/EBITDA: 30.35
Market Cap: $23.11BAvg. Daily Volume: 814,27352 Week Range: $172.05 – $368.87

4. Grocery Outlet Holding Corp. (GO): $28.86

Director Erik D. Ragatz acquired 70,000 shares of this grocery stores company, paying $28.49 per share for a total amount of $1.99 million. These shares were purchased indirectly by a limited partnership controlled by Mr. Ragatz.

You can view the list of recent insider transactions for Grocery Outlet Holding Corp. here.

P/E: 42.44Forward P/E: 25.32Industry P/E: 22.53
P/S: 0.76Price/Book: 2.52EV/EBITDA: 21.95
Market Cap: $2.84BAvg. Daily Volume: 973,20952 Week Range: $25.71 – $46.37

5. StepStone Group Inc. (STEP): $23.48

Head of Strategy Michael I. McCabe acquired 80,000 shares of this investment firm, paying $21.47 per share for a total amount of $1.72 million. Mr. McCabe increased his stake by 1258.46% to 86,357 shares with this purchase.

You can view the list of recent insider transactions for StepStone Group Inc. here.

P/E: N/AForward P/E: 13.57Industry P/E: 9.24
P/S: -38.12Price/Book: 1.91EV/EBITDA: 42.35
Market Cap: $2.58BAvg. Daily Volume: 301,12852 Week Range: $19.83 – $32.12

6. Driven Brands Holdings Inc. (DRVN): $25.41

Shares of this automotive services company were acquired by 2 insiders:

  • Chief Executive Officer Jonathan G. Fitzpatrick acquired 42,000 shares, paying $23.76 per share for a total amount of $997,920. Mr. Fitzpatrick increased his stake by 1.83% to 2,332,363 shares with this purchase.
  • EVP & Chief Financial Officer Gary W. Ferrera acquired 4,000 shares, paying $24.23 per share for a total amount of $96,920. Mr. Ferrera increased his stake by 6.77% to 63,101 shares with this purchase.

You can view the list of recent insider transactions for Driven Brands Holdings Inc. here.

P/E: 115.5Forward P/E: 17.05Industry P/E: N/A
P/S: 2Price/Book: 2.51EV/EBITDA: 16.03
Market Cap: $4.26BAvg. Daily Volume: 542,15252 Week Range: $23.35 – $35.45

7. Match Group, Inc. (MTCH): $38.97

Chief Executive Officer Bernard Jin Kim acquired 31,439 shares of this internet dating company, paying $34.44 per share for a total amount of $1.08 million. These shares were purchased indirectly by a trust.

You can view the list of recent insider transactions for Match Group, Inc. here.

P/E: 33.03Forward P/E: 16.24Industry P/E: 19.00
P/S: 3.42Price/Book: N/AEV/EBITDA: 15.25
Market Cap: $10.85BAvg. Daily Volume: 4,959,61452 Week Range: $30.73 – $87.46

You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. Airbnb, Inc. (ABNB): $118.06

Shares of Airbnb were sold by 2 insiders:

  • Director Joseph Gebbia sold 350,000 shares for $105.83, generating $37.04 million from the sale. These shares were sold indirectly by a trust.
  • Chief Technology Officer Aristotle N. Balogh sold 500 shares for $106.10, generating $53,050 from the sale.

You can view the list of recent insider transactions for Airbnb, Inc. here.

P/E: 38.58Forward P/E: 29.44Industry P/E: 16.10
P/S: 8.99Price/Book: 14.06EV/EBITDA: 34.29
Market Cap: $78.32BAvg. Daily Volume: 6,321,56852 Week Range: $81.91 – $144.63

2. Vertiv Holdings Co (VRT): $19.8

Managing Director, E+I Philip O’Doherty sold 1,144,030 shares of this electrical equipment & parts company for $20.16, generating $23.06 million from the sale. These shares were sold indirectly by Powerbar Limited, an entity controlled by the reporting person.

You can view the list of recent insider transactions for Vertiv Holdings Co here.

P/E: 63.87Forward P/E: 13.38Industry P/E: 19.00
P/S: 1.24Price/Book: 4.84EV/EBITDA: 14.67
Market Cap: $7.52BAvg. Daily Volume: 4,409,72352 Week Range: $7.76 – $20.53

3. Lowe’s Companies, Inc. (LOW): $209.81

Shares of this home improvement retailer were sold by 3 insiders:

  • EVP, Merchandising William P. Boltz sold 36,341 shares for $203.00, generating $7.38 million from the sale. 13,341 of these shares were sold as a result of exercising options immediately prior to the sale.
  • EVP, Chief Information Officer Seemantini Godbole sold 17,634 shares for $202.05, generating $3.56 million from the sale.
  • EVP, Supply Chain Donald Frieson sold 13,114 shares for $203.45, generating $2.67 million from the sale.

You can view the list of recent insider transactions for Lowe’s Companies, Inc. here.

P/E: 19.57Forward P/E: 14.5Industry P/E: 16.10
P/S: 1.28Price/Book: N/AEV/EBITDA: 11.41
Market Cap: $122.94BAvg. Daily Volume: 2,920,31152 Week Range: $170.12 – $223.31

4. Paylocity Holding Corporation (PCTY): $181.35

Director Steven I. Sarowitz sold 72,339 shares of this software application company for $171.31, generating $12.39 million from the sale.

You can view the list of recent insider transactions for Paylocity Holding Corporation here.

P/E: 86.77Forward P/E: 32.5Industry P/E: 19.00
P/S: 9.24Price/Book: 13.17EV/EBITDA: 61.18
Market Cap: $10.12BAvg. Daily Volume: 508,06352 Week Range: $152.01 – $276.88

5. Ares Management Corporation (ARES): $89.29

Shares of this asset management company were sold by 2 insiders:

  • Co-Founder, CEO and President Michael J. Arougheti sold 132,461 shares for $84.83, generating $11.24 million from the sale. 63,585 of these shares were sold indirectly by Atticus Enterprises LLC.
  • Chief Mktg. & Strategy Officer Ryan Berry sold 5,000 shares for $87.32, generating $436,600 from the sale.

You can view the list of recent insider transactions for Ares Management Corporation here.

P/E: 79.72Forward P/E: 17.58Industry P/E: 9.24
P/S: 8.56Price/Book: 9.69EV/EBITDA: 29.23
Market Cap: $27BAvg. Daily Volume: 1,063,36952 Week Range: $53.15 – $90.28

6. Krystal Biotech, Inc. (KRYS): $124.2

President and CEO Krish S. Krishnan sold 50,000 shares of this biotech company, for $116.20, generating $5.81 million from the sale. 25,000 of these shares were sold indirectly by Mr. Krishnan’s spouse.

You can view the list of recent insider transactions for Krystal Biotech, Inc. here.

P/E: N/AForward P/E: -62.73Industry P/E: 26.36
P/S: N/APrice/Book: 6.54EV/EBITDA: -20.9
Market Cap: $3.2BAvg. Daily Volume: 271,53852 Week Range: $49.17 – $124.23

7. Arista Networks, Inc. (ANET): $162.5

Shares of this networking company were sold by 3 insiders:

  • CTO and SVP Software Eng. Kenneth Duda sold 36,000 shares for $154.67, generating $5.57 million from the sale. 20,000 of these shares were sold as a result of exercising options immediately prior to the sale.
  • SVP, Chief Operating Officer Anshul Sadana sold 18,817 shares for $153.21, generating $2.88 million from the sale.
  • President and CEO Jayshree Ullal sold 13,500 shares for $171.11, generating $2.31 million from the sale. These shares were sold indirectly by a trust.

You can view the list of recent insider transactions for Arista Networks, Inc. here.

P/E: 35.48Forward P/E: 24.07Industry P/E: 25.15
P/S: 10.32Price/Book: 9.39EV/EBITDA: 26.67
Market Cap: $50.1BAvg. Daily Volume: 3,243,67652 Week Range: $89.115 – $178.36

You can view the full list of sales from this Insider Sales page.

The list of all insider purchases and sales by management people is only available to InsideArbitrage Premium and Plus members.

Disclaimer:  Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.