Match Group Inc
Match Group Inc
IBD Stock Analysis
- Stock started cup with deep handle in August with buy point of 92.61
- Alternative buy point of 90.10 also valid, shares down, but above 91
- Stock’s Relative Strength Rating now stands at 92 out of possible 99
Industry Group Ranking
Cup with Handle
* Not real-time data. All data shown was captured at
2:00PM EDT on
Match Group (MTCH) is the IBD Stock of the Day as the Tinder app owner looks ahead to its spinoff from IAC (IAC). Match stock this week tested a newly forged entry point as the global coronavirus emergency eases.
IAC’s spinoff of Match stock is expected to close by the end of June. Controlled by Barry Diller, IAC holds an 80% stake in Match.
While the spinoff will increase Match stock’s liquidity, the company will carry substantial debt.
Match captures most of its revenue from paid subscribers to the popular Tinder mobile app. It also owns other brands such as Match.com, Hinge, OkCupid, PlentyofFish and Meetic.
Match stock has a track record of overcoming headwinds, such as Facebook‘s (FB) rollout of a new dating service. Match stock also rebounded from a deep correction after the IAC spinoff was announced and its chief executive left, amid the coronavirus lockdown.
Match Stock: IAC Spinoff Expected To Close
According to the pattern recognition tools of IBD MarketSmith, Match stock has an entry point of 92.61. However, a newer 90.10 handle entry is also valid. Shares were at 91.51, down 2.7%, in Thursday afternoon trades.
By either entry point, Match stock moved into a buy zone for three days this week before pulling back in today’s session.
The pending spinoff from IAC will be a big event and investors may be cautious. One wild card is that IAC holds an option to sell up to $1.5 billion of Match stock prior to the spinoff closing, Deutsche Bank noted in a report.
Match now has a Relative Strength Rating of 92 out of a possible 99. The best stocks own ratings above 80.
In addition, Match’s Accumulation/Distribution Rating has improved to B, according to IBD Stock Checkup.
The rating analyzes price and volume changes in a stock over the past 13 weeks of trading. The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
Match CEO Change
Match stock weakened in January shortly after IAC announced terms of the spinoff. On Jan. 28, Match also announced the departure of Chief Executive Mandy Ginsberg for personal reasons. Company President Shar Dubey took over as CEO on March 1.
The Covid-19 emergency worsened in February and early March. Match corrected some 52% from January.
From the deep cup and deep handle, Match stock strengthened along with other technology stocks. Its Relative Strength line has been rising, albeit in low volume, and recently touched a new high. During that period, Match stock formed a new base and the 90.10 handle entry.
The company said it had 6 million Tinder dating app subscribers as of March 31. While Tinder growth slowed amid Covid-19, more countries are relaxing shelter-in-place restrictions.
Match Stock: Social Distancing Easing
Overseas growth in markets such as India, Japan, Taiwan and South Korea is key for Tinder and other products, analysts say.
Should social distancing persist in a second coronavirus wave, Match has told analysts it’s upbeat about features such as one-to-one video calling.
“We believe Match could take more of a wait-and-see approach to new product launches in 2020, including for Tinder,” BMO Capital Markets analyst Daniel Salmon said in a recent report to clients. “We expect Tinder sub additions will remain muted in 2Q, and 3Q and 4Q as visibility remains low.”
He added: “A la carte transactions have been more impacted than subscriptions, and so incentive to launch new a la carte features is low right now.”
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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