Tinder owner Match Group plunges 10% after forecasting sales that were below Wall Street targets
- Tinder's owner Match Group plunged in premarket trading, after its sales forecast missed Wall Street expectations.
- The dating firm's stock fell 10% in premarket trading at 12:46 p.m. in London (7:45 a.m. ET).
- Match Group is facing lawsuits and paying more in legal costs.
- In an interview with Bloomberg, the CFO said that Brexit and currency movements were hampering sales. The company is also paying more in legal costs.
- View Business Insider's homepage for more stories.
Tinder, Hinge and Plenty of Fish's owner, Match Group, is set to plunge at the open of trading after posting a fourth-quarter sales and EBITDA forecast that was lower than Wall Street targets.Shares of the dating giant tumbled 10% in premarket at 10 a.m. in London (5 a .m. in New York). Revenue for the fourth quarter will be between $545 million to $555 million, the firm said in its Q3 earnings presentation. This is lower than Wall Street's expectation of $560 million, according to Bloomberg. Advertisement
EBITDA, or earnings before interest, tax, depreciation and amortization, will be between $205 million and $210 million, which also fell short of analysts' expectations that were calculated by Bloomberg.
Tinder was a bright spot - the company said the app's year on year average subscriber growth is up 38%, while sales in the third quarter boomed by 49%.Match's share plunge would wipe nearly $2 billion from the group's market cap of $19.32 billion, based on the closing price on Tuesday.
The Dallas-based group, which owns major dating brands such as OkCupid and Match.com, said in an interview with Bloomberg that sales were hurting due to various lawsuits as well as Brexit and currency movements.The company is also paying more on legal costs. In September, Match Group was sued by the Federal Trade Commission after alleging that the company used fake love interests to try and get people to buy subscriptions for the apps. Like on Tinder, much of Match Group's sales are driven by advertising as well as people paying for subscriptions or premium services. Advertisement
Elsewhere in the report, Match Group said that the number of active users was increasing and that most users use its apps five days a week. It also said that it would be targeting Gen Z users through an interactive video series on Tinder.Advertisement
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