A New Chance To Buy Into Match Group: IPO Quiet Period Expiration

Match Group, Incorporated (NASDAQ: MTCH) - Buy Recommendation - $14.25 PT

The 25-day IPO quiet period on Match Group, Incorporated will come to an end on December 14, 2015, allowing the firm's IPO underwriters to publish reports and recommendations on December 15.

Match Group is a Dallas-based company that provides dating products worldwide across a wide variety of websites, including Match.com. (See our IPO preview of MTCH here; we also previewed the quiet period event on our IPO Insights platform.)

Match Group's share price will likely see a temporary increase as a result of the release of underwriter reports. Current research shows a significant potential for above-market returns in the five days prior to and two days after the conclusion of a company's quiet period.

Early Market Performance Sparks Interest

Match Group was priced at $12, at the low end of its expected price range of $12 to $14. The stock opened at $13.50 and closed at $14.74 for an increase of 22.8 percent on its first day of trading. It reached a high of $15.20 on the following day, although the stock has declined slightly since then to trade at 13.25 (market close 12.5.2015).

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(Nasdaq.com)

Business Overview: Operator of Dating Websites

Match Group is known primarily for its main dating website called Match.com, although the company operates and maintains around 45 brand names including , OkCupid, PlentyOfFish, OurTime, Tinder, Twoo, Meetic, SingleParentMeet, PetPeopleMeet, SpeedDate, LoveandSeek, and more. It websites encompass 38 languages across 190 countries. The company also provides various test preparation, college counseling, and academic tutoring services.

Match Group currently has an estimated 59 million monthly active users (MAU) and approximately 4.7 million paid members through the quarter ended September 30, 2015.

Match Group is a wholly owned subsidiary of IAC/InterActive Corp, and subsequent to the initial offering, IAC will own all of the outstanding class B shares, which have greater voting power. Therefore, IAC will retain control over Match, including the election of board members, acquisitions or mergers, and payment of dividends.

Match posted net earnings of $148 million in 2014, $126 million in 2013, and $90.3 million in 2012. The company has realized increasing revenue over the same three years from $713 in 2012 to $888 million in 2014. Despite this, Match noted that it does not expect to pay dividends in the near future and will apply earnings to grow the company. A portion of the IPO proceeds will be used to pay back debt owed to IAC.

Management Team Overview

CEO Sam Yagan is a co-founder of OkCupid. He holds a Bachelor's in Applied Mathematics and Economics from Harvard College and an MBA from the Stanford Graduate School of Business. Previously, he gained strong experience at SparkNotes and eDonkey. He also co-founded TechStars Chicago and Corazon Capital.

Chairman Gregory Blatt has served since December 2013. Previously, he served as CEO of IAC from December 2010 to December 2013. Prior to joining IAC, Mr. Blatt served as General at Martha Stewart Living Omnimedia and an associate at the law firms Grubman Indursky & Shire and Wachtell, Lipton, Rosen & Katz. He has a B.A. from Colgate University and a J.D. from Columbia Law School.

Competitors: eHarmony, Badoo, Spark Network and ElitePartner

The online dating industry remains highly competitive, and rivals to Match include eHarmony, Spark Networks (ChristianMingle, Jdate), Parship, Zoosk, ElitePartner, e-Darling and Badoo. In addition, while online dating is popular, the company notes in its SEC filings that conventional dating methods are its biggest competition as well as services such as in-person matchmakers and social media platforms.

Buying Opportunity: Powerful Underwriters Could Boost Share Price at Quiet Period Expiration

Match Group's IPO underwriters will likely seek to capitalize on the stock's recent growth through the release of positive reports, beginning with the conclusion of the quiet period. These underwriters include: Allen & Co., BofA Merrill Lynch, J.P. Morgan Securities, Barclays Capital, BMO Capital Markets, BNP Paribas Securities, Cowen & Co., Deutsche Bank Securities, Fifth Third Securities, Oppenheimer & Co., PNC Capital Markets, and SG Americas Securities.

Investors who wish to buy into Match Group may wish to take advantage of the event. Following our recent research, we suggest buying 5 days prior to December 14th to take full advantage of an impending uptick in price due to a flood of positive news from powerful underwriters.

We are particularly keen on MTCH as its progress has been solid post-IPO, and tech firms are often sensitive to positive reports.