IAC Plunges Most in Seven Years After Sales Miss Estimates

  • Sales growth stymied by decline in publishing revenue
  • Match Group declines to lowest level since its public offering

IAC/InterActiveCorp, the online media company controlled by Barry Diller, and Match Group Inc., the online dating service partially spun out in November, tumbled after reporting fourth-quarter revenue that missed analysts’ estimates.

IAC declined 10 percent to $45.78 at the close in New York, the biggest single-day fall since September 2008. Match Group dropped 13 percent to $10.66, its lowest closing price since the company first offered shares at $12 in November.

IAC still owns 85 percent of Match Group, which accounted for the biggest portion of IAC’s sales. Fourth-quarter revenue increased 2.2 percent to $848.7, the company reported Tuesday, missing analysts’ projections on falling sales in the publishing and application units. IAC said it’s cutting dividends in order to spend more on acquisitions to drive growth.

“We’re in refocus mode,” IAC CEO Joey Levin said on a conference call Wednesday to discuss the earnings.

Match Group, which includes the dating websites Match, Tinder, OkCupid and PlentyOfFish, reported sales of $267.6 million compared with the analysts’ average estimate of $275.9 million. Average revenue per paying user fell 15 percent to 53 cents -- much of the decline was attributed to an increase in the proportion of paying customers at the group’s lower-cost websites such as Tinder and PlentyOfFish, Match said Tuesday in a statement.

Dating Pricing

Pricing rates for Tinder and Meetic -- the Europe business -- have declined, Greg Blatt, Match Group’s chief executive officer, said Wednesday on a conference call to discuss the earnings. While the company is targeting to double Tinder’s paying subscriber count this year, average revenue per paying user has decreased for the site because of newly introduced longer-term packages that are priced lower, Blatt said. Some analysts have cited concerns that Tinder may encroach on other Match properties.

“While Tinder may have some cannibalistic effect, the impact that it has on bringing new users under 35 into the overall ecosystem and then the impact that those users have on our pre-existing products who have them brought into the category far outweighs any cannibalism that we got,” Blatt said.

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