Match Stock Hits High On Hyperconnect Acquisition As Tinder Growth Slows

Wall Street gave Match Group‘s (MTCH) acquisition of South Korean mobile app maker Hyperconnect for $1.73 billion a thumbs-up on Wednesday. Match stock rose on the deal, which comes amid slowing growth for Match’s Tinder dating app.

Dallas-based Match’s stock popped 5.4% to an all-time high of 167.43 on the stock market today. Match said it will finance the deal with 50% in stock and 50% cash.

The Hyperconnect acquisition comes just as Match rival Bumble (BMBL) goes public.

Match is the biggest provider of online dating services. But Tinder’s revenue growth slowed in the December quarter as Match disclosed less data on Tinder paid subscriber growth.

Hyperconnect garnered $200 million in fiscal 2020 from two mobile apps, Azar and Hakuna, said a Jefferies report. Match expects the South Korean company to grow revenues 40% to 50% in 2021

Match Stock: Acquisition Expands Asian Market Opportunity

“In addition to the geographic diversification, Match will also expand into ‘social discovery,’ an addressable market that is roughly double the size of dating,” Jefferies analyst Brent Thill said in a report to clients.

Japan recently became Match’s second biggest market, behind the U.S. But Tinder growth has slowed in the U.K., Brazil and India amid the coronavirus pandemic. Match has pivoted to video chatting amid the Covid-19 outbreak.

“Hyperconnect’s primary asset is its low-cost video tech and AI deep learning capabilities, which enable a high quality and very personalized user experience,” added Thill.

At Truist Securities, analyst Youssef Squali also praised the acquisition.

“Short-term, this acquisition should allow Match to leverage Hyperconnect’s proprietary video technology on its existing apps,” he said in his note to clients. “Match should also be able to foster growth in Asia as Hyperconnect currently generates over 75% of usage and revenues from Asia.”

Match stock is extended from an entry point of 123.10. Bumble, a rival of Match, aims to raise $1.8 billion in its initial public offering.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.


IBD Live: A New Tool For Daily Stock Market Analysis

Find Compelling Growth Stocks With IBD’s Stock Of The Day

View Breakout Stocks & Technical Analysis

Best Growth Stocks To Buy And Watch: See Updates To IBD Stock Lists

Get A Free Trial Of IBD Leaderboard

Most Related Links :
Business News Governmental News Finance News

Source link

Back to top button