How The Master Of JDate And Christian Mingle Lost At The Business Enterprise Of Love
Spark Networks, owner of JDate, Christian Mingle, along with other dating sites, is facing an intense activist campaign by the hedge investment Osmium Partners, which can be trying to unseat the board and force a purchase for the distressed business.
Then Spark Networks, owner of JDate, Christian Mingle, and a handful of other niche dating sites, is about to get its heart broken if love is a battlefield.
Osmium Partners is virtually particular to win the four board seats it is gunning for when Spark holds its yearly shareholder conference in a few days, sources acquainted with the problem stated, allowing the activist hedge investment to assume control and force a purchase associated with business. Initially planned for June 17, Spark has recently delayed the meeting that is annual June 28, a move these sources said is targeted at buying Spark additional time to rally shareholders to vote down Osmium’s proposal or preempt a forced sale by securing a unique buyout offer.
A agent for Spark, which trades underneath the “LOV” stock ticker, declined to comment beyond citing the business’s general public filings.
Osmium, which has 15% of Spark, established its proxy battle 
in December 2013, citing exactly exactly what it claims are Spark’s bad corporate governance, settlement issues, and stock price that is declining. The hedge investment additionally alleges that Spark has mismanaged JDate, its “crown jewel,” and that its networks that are christian been underperforming in accordance with their internet dating peers.
At a per share price of approximately $5, a nearly 50% decrease within just per year, the marketplace and investors may actually have fallen out from love with “LOV.” As Osmium waits to see whether voters will think its four board nominees are a match, listed here is a glance at a few of the hedge investment’s other gripes with Spark, according to a presentation it offered 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 taken into account 95% associated with organization’s income since its inception 17 years back. 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 very first quarter 2014 earnings call, where it reported its slowest subscriber figures since 2006.
In addition, the advertising for the JDate rebranding, as well as Christian Mingle, has fallen quick while the organization’s shelling out for these endeavors has received repercussions that are dire relating to Osmium.
“Spark’s ‘media strategy’ is a unverified and distraction that is immaterial the business’s core, high-margin premium dating company,” Osmium composed in its presentation. “These interruptions away from core that is scalable have actually resulted in $29.4 million in fixed overhead supported by simply $69 million in revenue. This has lead to Spark revenue that is generating employee 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 original site that is dating 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 used your message ‘pleased’ no fewer than 20 times on profits telephone phone telephone calls describing the business’s outcomes during the last eight quarters,” Osmium’s presentation states. “Over this time around duration, the business has produced over $32 million in net LOSSES — 30% of this economy cap.”
Spark administration can also be perhaps maybe not placing its cash where its lips occurs when it comes down to spending when you look at the business.
“Management and Board have actually restricted money in danger in outright stock ownership,” Osmium claimed. “Excluding commodity they received at no real expense to by themselves, administration therefore the Board collectively possess just 0.2percent regarding the Company.”
Mariah Summers is just business reporter for BuzzFeed Information and it is situated in ny. Summers states on hospitality, travel and real-estate.