- IAC announced plans to spin off Tinder parent Match Group into its own company on Friday.
- Shares of Match Group fell as much as 4.3% following the news. IAC gained as much as 6.2%.
- ANGI Homeservices will stay with IAC until the Match spin-off is completed, the company said. In August, IAC said it was exploring options to spin off both groups.
- Watch Match Group trade live on Markets Insider.
Match Group may soon be single.
Shares fell as much as 4.3% Friday after technology holding company IAC announced that it plans to spin off all of its shares of Match Group, the online dating company behind Tinder. IAC stock rose as much as 4.3%.
“IAC is confident that the proposal communicated to the Match Group special committee provides strong footing for Match Group to begin its journey as a thriving, independent company,” said IAC chief executive officer Joey Levin in a press release.
IAC indicated in August that it was exploring options to spin off it’s 80% stake in Match Group, and it’s 83% stake in ANGI Homeservices. The company has a track record of taking company’s under its wing and later spinning them off. It’s done the same thing with Expedia, Home Shopping Network, Ticketmaster, and LendingTree.
ANGI Homeservices — which owns Angie’s List and Handy — will stay under IAC’s umbrella until the split with Match Group has been completed, Levin said. Shares of ANGI rose as much a 7.09% on the news today, but are down as much as 53% year to date.
In an August letter to shareholders, Levin wrote that the company was struggling due to “a combination of issues around marketing and an increasingly tight supply of service professionals in certain categories.”
Read more: Nobel laureate Robert Shiller forewarned investors about the dot-com and housing bubbles. Now he tells us which irrational market behaviors have him most worried.
Match Group, on the other hand, has proven itself as a leader in the online dating space with Match.com, Tinder, Hinge, and OkCupid. It’s shares are up more than 75% this year, and some Wall Street analysts think it could soar even higher. In a Thursday note, Oppenheimer upgraded Match Group to “outperform” and gave it an $89 price target.
The upgrade is due to solid download data that shows “an acceleration in Tinder and localized offerings,” Oppenheimer analysts led by Jason Helfstein wrote. In addition, an Oppenheimer survey indicated that only 44% of US singles are currently using an online dating product, “suggesting material growth in overall usage.”
Before the spinoff is completed, it will have to be approved by IAC’s board, as well as IAC and Match Group shareholders and stakeholders.
IAC has been making acquisitions since it started exploring the spinoffs of ANGI and Match Group in August. It recently bought a small stake in Turo, a car sharing company. It will also be able to focus on investments in Vimeo, Dotdash, Mosaic Group, and Bluecrew.
Match Group is up more than 70% year-to-date.