The CEO of Match Group Just Made a Large Stock Purchase

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Insider buying can provide clues about a stock’s next move. Insiders sell company stock for a number of reasons. Yet they only buy stock for one reason – they expect it to rise.

In this report, we are going to highlight a large insider purchase at Match Group Inc (MTCH:US). Match is an internet company that specializes in dating services. Its brands include, Tinder, Hinge, and Plenty of Fish. It is listed on the Nasdaq and currently has a market cap of around $11.58 billion.

Insider Buying at Match

2iQ’s insider transaction data shows that on May 31, Match’s CEO Bernard Kim purchased 31,439 shares via his family trust at a price of $34.44 per share. This trade cost the insider $1.08 million and increased the trust’s holding to 48,500 shares.

Large Purchase

This trade is notable for several reasons.

Firstly, it is large in size. Not only is it large in nominal terms but it is also large in relative terms, having increased the size of the insider’s holding by around 184%.

Secondly, Mr. Kim has considerable experience in the internet industry. Before joining Match, he served as Zynga’s President where he built and led a global team that was responsible for marketing, user acquisition, ad monetization, revenue, communications, and more. While at Zynga, he helped grow the company’s market cap by 300%. So, he is likely to have a good understanding of Match Group’s potential.

Encouraging Outlook

Match Group’s recent Q1 results were underwhelming.

For the quarter, revenue came in at $787 million, down 1% year on year and below expectations. Meanwhile, revenue guidance for Q2 was also below forecasts. The company blamed macro weakness for the sub-par results.

However, looking ahead, the company was relatively optimistic about the future. Management noted that thanks to recent changes at Tinder, it is positioned to exit 2023 with “much improved financial performance”. It added that Hinge is seeing “terrific momentum” in Europe and that it is continuing to expand globally.

As for capital allocation, the company said that it has significant levels of cash flow, and that it expects to return “at least half” to shareholders over the next few years.

We’re confident that as our momentum continues to build, we will exit 2023 as a solidly growing business. We believe this combination of capital return and growth should provide very attractive total shareholder returns,” said Mr. Kim.

In light of this outlook, we see the insider buying here as a bullish development.