Spark Networks, owner of JDate, Christian Mingle, along with other dating web sites, is dealing with a intense activist campaign because of the hedge investment Osmium Partners, that is trying to unseat the board and force a purchase associated with company that is troubled.
If love is just a battlefield, then Spark Networks, owner of JDate, Christian Mingle, and a small number of other niche online dating sites, is approximately to have its heart broken.
Osmium Partners is practically particular to win the four board seats it is gunning for when Spark holds its yearly shareholder conference week that is next sources knowledgeable about the problem stated, allowing the activist hedge investment to take solid control and force a purchase of this business. Initially planned for June 17, Spark has recently delayed the meeting that is annual June 28, a move these sources stated is targeted at buying Spark more hours to rally investors to vote down Osmium’s proposal or preempt a forced sale by securing a unique buyout offer.
A agent for Spark, which trades beneath the “LOV” stock ticker, declined to comment beyond citing the business’s public filings.
Osmium, which has 15percent of Spark, established its proxy battle in December 2013, citing just just what it claims are Spark’s bad business governance, settlement issues, and stock price that is declining. The hedge fund additionally alleges that Spark has mismanaged JDate, its “crown jewel,” and that its networks that are christian been underperforming in accordance with their online dating sites peers.
The market and shareholders seem to have actually fallen out from love with “LOV. at a per share price of approximately $5, a almost 50% decrease in under per year” As Osmium waits to see whether voters will think its four board nominees really are a match, here is a glance at a few of the hedge investment’s other gripes with Spark, predicated on a presentation it provided to investors in might:
Too little rebranding and bad online marketing strategy.
Osmium stated with its presentation that Spark has neglected to rebrand JDate, which, along side Christian Mingle, has taken into account 95percent associated with the business’s income since its inception 17 years ago. Spark just got around to rebranding JDate in this present year’s very first quarter, and its own Chairman and CEO Greg Liberman also conceded for this failure on its very first quarter 2014 earnings call, where it reported its slowest customer figures since 2006.
In addition, the advertising for the JDate rebranding, as well as for Christian Mingle, has fallen quick as well as the business’s shelling out for these endeavors has already established repercussions that are dire in accordance with Osmium.
“Spark’s ‘media strategy’ is a unverified and distraction that is immaterial the business’s core, high-margin paid dating company,” Osmium penned with its presentation. “These interruptions outside of the https://hookupdates.net/latinamericancupid-review/ scalable core company have actually resulted in $29.4 million in fixed overhead supported by simply $69 million in income. This has led to Spark revenue that is generating worker this is certainly 71% less than rivals Match.com, eHarmony and Zoosk.”
Failure to innovate.
Osmium also claims that Spark has neglected to innovate and remain competitive through the development of “add-ons,” or features beyond the standard dating website solutions of profile creation and usage of a database. The hedge funded cited HowAboutWe for partners and “featured profiles” on eHarmony and OKCupid as types of brand name add-ons which have strengthened profitability at these websites.
Management that is “pleased” with bad outcomes.
Despite profits misses and a decreasing stock cost, Osmium contends that Spark’s administration is delusional with regards to the business’s financials.
“We think Mr. Liberman has utilized your message ‘pleased’ no fewer than 20 times on profits telephone phone calls describing the business’s outcomes throughout the last eight quarters,” Osmium’s presentation states. “Over this time around duration, the organization has produced over $32 million in net LOSSES вЂ” 30% regarding the economy limit.”
Spark administration can also be perhaps perhaps not placing its money where its mouth is when it comes down to spending when you look at the business.
“Management and Board don’t have a lot of money at an increased risk in outright stock ownership,” Osmium claimed. “Excluding investment they received at no real expense to by themselves, management in addition to Board collectively possess just 0.2percent associated with the Company.”
Mariah Summers is just company reporter for BuzzFeed Information and it is situated in nyc. Summers reports on hospitality, travel and real-estate.