Match.com (Nasdaq: MTCH) Stock Debut Is Here, What Investors Need to Know Now
By Diane Alter, Contributing Writer, Money Morning•
Match Group Inc. (Nasdaq: MTCH) will debut on Thursday, Nov. 19, in one of the most anticipated tech IPOs of the year.
The latest spin-off from Barry Diller's IAC/InterActiveCorp (Nasdaq: IACI) will trade on the Nasdaq under the ticker "MTCH." The company will sell 33.3 million shares of MTCH stock at a price range of $12 to $14 a share.
With one in 10 Americans reportedly using an online or mobile dating site, according to Pew Research, anticipation is running high ahead of the Match.com IPO.
Here are 15 must-know details about MTCH stock...
15 Must-Know Facts About MTCH Stock
The Match.com IPO aims to raise $536.7 million, valuing the company at $3.4 billion. That's about $800 million less than some analysts had expected earlier this year.
Based on IAC's overall spin-off record, MTCH stock could trade at a significant premium above the expected $12 to $14 price range. Match will be the sixth public spin-off IAC has completed in the last decade. Those include Expedia Inc. (Nasdaq: EXPE), which is up a whopping 551% since its August 2005 IPO. The S&P 500 is up just 64% in the same time.
Dallas-based Match.com, with offices in West Hollywood, San Francisco, Tokyo, Rio de Janeiro, and Beijing, says it has turned a profit in each of the last three years. Over the last 12 months ended June 30, it reported $1 billion in revenue.
In the first nine months of 2015, revenue rose 16% as paying users expanded by 15%.
Match Group has about 59 million active monthly users. Roughly 4.7 million of them are paid users. Customers come from 190 countries and use 38 languages.
Match got more than half of its new paying users from international markets in the first nine months of 2015. Although those 1.35 million international users increased by 24%, international revenue was flat based on a mixed shift to lower brands and lower rates.
A large part of Match's success has come from launching new apps and features, such as the swipe left or swipe right that has become Tinder's signature. Tinder makes money from fees. It charges up to $19.99 a month for premium features. Match's filing showed Tinder had 583,000 paid members at the end of September, six months after the launch of its premium service.
OkCupid is free but has paid memberships with extra features. Match.com charges users a monthly fee. The average payer in 2014 spent more than $200.
Match Group completed the acquisition of PlentyOfFish, another online dating site, ahead of the Match.com IPO date. Match paid $575 million in the acquisition last month.
Underwriters have a 30-day option to buy an additional 5 million shares. The underwriters are: JPMorgan Chase & Co. (NYSE: JPM); Allen & Company Inc.; Bank of America Merrill Lynch; Deutsche Bank Securities Inc.; BMO Capital Markets; Barclays Plc. (NYSE ADR: BCS); BNP Paribas; Cowen and Company; Oppenheimer & Co.; PNC Capital Markets LLC; Societe General SA (OCTMKTS ADR: SCGLY); and Fifth Third Securities.
There will be three classes of common MTCH stock, Class B common stock, and Class C common stock. Common stockholders will be entitled to one vote per share, while Class B shareholders will get 10 votes per share. Class C shareholders cannot vote.
Parent company IAC will own all shares of outstanding Class B MTCH stock. It will maintain majority control of the company after the offering. Diller's company is keeping at least 84% of the shares and, through a dual-class share structure, 98% of the voting rights.
Match Group said that it plans to use the Match.com IPO proceeds to repay related-party debt owed to IAC. It also plans to generate more advertising revenue, noting its current sales are "sustainably below what we should be able to achieve."
Match also intends to further expand its mobile business. Some 68% of new users in the first half of 2015 signed up via a mobile device, according to the company's filing.
With IAC still heavily invested in Match and able to provide financing, any concerns about Match's future funding prospects should be muted. IAC also owns web properties like Vimeo, HomeAdvisor, About.com, and CollegeHumor. Match Group made up about a third of IAC's overall revenue in Q3.
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