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Match Analysts Unfazed By Facebook’s Expanded Dating Service

Shares opened higher but subsequently fell as much as 7.2%, putting it on track for its biggest one-day decline since December.

Match Analysts Unfazed By Facebook’s Expanded Dating Service
A bus with Facebook Inc. signage exits the company’s headquarters in Menlo Park, California, U.S. (Photographer: David Paul Morris/Bloomberg)

(Bloomberg) -- Match Group Inc. shares fell sharply in Thursday trading after Facebook Inc. announced it would be expanding its dating service into the U.S., raising the prospect of a major competitor to the operator of the Tinder app.

Shares opened higher but subsequently fell as much as 7.2%, putting the company on track for its biggest one-day decline since December. IAC/InterActiveCorp -- which last month said it was considering a spin-off of Match, one of its publicly traded subsidiaries -- fell 4.2%.

Match Analysts Unfazed By Facebook’s Expanded Dating Service

Facebook’s dating feature was first unveiled in 2018 and prior to its U.S. launch it has previously been tested in 19 other countries. According to data compiled by Bloomberg, slightly more than half of Match’s 2018 revenue came from the U.S.

Despite Match’s share-price drop, Bloomberg Intelligence wrote that there was “limited risk” for the company from Facebook. The company’s apps, particularly Tinder, “should continue to gain subscribers and mind share, despite Facebook’s latest ploy to deepen penetration in the dating market,” analyst Seema Shah wrote to clients.

This view was echoed by SunTrust Robinson Humphrey, which wrote that the impact of Facebook’s service was “likely not material” to Match, and the the sell-off looked like a buying opportunity. Match has a “leadership position in most markets served,” it wrote, and this “should allow it to continue to show healthy growth with relatively limited impact from Facebook’s dating product.”

SunTrust analyst Youssef Squali added that Facebook may have some “negative reputational overhang from the last couple years, which may prevent mass adoption of the service.”

Earlier on Thursday, Squali upgraded Match to buy and lifted his price target to the highest on the Street. “We expect Tinder to once again print one of its best quarterly net adds ever” in the third quarter, and it has “further headroom to grow,” he wrote to clients.

To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Jennifer Bissell-Linsk

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