Spark Networks, owner of JDate, Christian Mingle, as well as other dating sites, is dealing with a tough activist campaign by the hedge investment Osmium Partners, which can be seeking to unseat the board and force a purchase regarding the distressed business.
If love is a battlefield, then Spark Networks, owner of JDate, Christian Mingle, and a small number of other niche online dating sites, is mostly about to have its heart broken.
Osmium Partners is nearly specific to win the four board seats it is gunning for when Spark holds its yearly shareholder conference week that is next sources acquainted with the specific situation stated, allowing the activist hedge investment to take close control and force a purchase regarding the 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 purchasing Spark additional time to rally shareholders to vote down Osmium’s proposal or preempt a forced sale by securing its very own buyout offer.
A agent for Spark, which trades underneath the “LOV” stock ticker, declined to comment beyond citing the business’s general general public filings.
Osmium, which has 15% of Spark, launched its proxy battle in December 2013, citing exactly exactly what it claims are Spark’s bad corporate governance, payment issues, and decreasing stock cost. The hedge investment additionally alleges that Spark has mismanaged JDate, its “crown jewel,” and therefore its networks that are christian been underperforming in accordance with their online dating peers.
The market and shareholders may actually have actually fallen right out of love with “LOV. at a per share price of approximately $5, a almost 50% decrease within just per year” As Osmium waits to see whether voters will think its four board nominees are really a match, here is a glance at a number of the hedge investment’s other gripes with Spark, according to a presentation it provided to investors in might:
Too little rebranding and marketing strategy that is poor.
Osmium stated in its presentation that Spark has neglected to rebrand JDate, which, along side Christian Mingle, has accounted for 95percent of this company’s income since its inception 17 years back. Spark just got around to rebranding JDate in this current year’s very first quarter, and its particular Chairman and CEO Greg Liberman also conceded to the failure on its very very first quarter 2014 earnings call, where it reported its slowest customer figures since 2006.
In addition, the advertising associated with JDate rebranding, as well as for Christian Mingle, has fallen brief therefore the organization’s shelling out for these endeavors has already established serious repercussions, based on Osmium.
“Spark’s ‘media strategy’ can be a unverified and immaterial distraction from the business’s core, high-margin premium dating company,” Osmium composed with its presentation. “These interruptions outside of the core that is scalable 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 additionally claims that Spark has neglected to innovate and remain competitive through the development of “add-ons,” or features http://www.hookupdates.net/gaydar-review beyond the original site that is dating of profile creation and use of a database. The hedge funded cited HowAboutWe for Couples and “featured profiles” on OKCupid and eHarmony as types of brand name add-ons which have strengthened profitability at these websites.
Management this is certainly “pleased” with bad outcomes.
Despite earnings misses and a decreasing stock cost, Osmium contends that Spark’s administration is delusional in terms of the business’s financials.
“We think Mr. Liberman has utilized your message ‘pleased’ no fewer than 20 times on profits telephone telephone telephone calls explaining the business’s results during the last eight quarters,” Osmium’s presentation states. “Over this time around duration, the business has produced over $32 million in net LOSSES вЂ” 30% for the economy limit.”
Spark management can also be maybe not putting its cash where its mouth is whenever it comes down to spending within the business.
“Management and Board don’t have a lot of money at an increased risk in outright stock ownership,” Osmium claimed. “Excluding commodity they received at no real expense to by themselves, administration while the Board collectively possess just 0.2% regarding the business.”
Mariah Summers is a continuing company reporter for BuzzFeed Information and it is located in ny. Summers reports on hospitality, travel and estate that is real.