Spark Networks Stock Nears 52 Week Low

OPW -- Aug 27 -- OPW needs to provide more coverage on the internet dating companies that are publicly traded. So to raise our motivation levels and put a bit of skin in the game, Irena and I have invested $5k in Spark Networks stocks today, for starters. Here's where Spark Networks stands per Google Finance. Their market capitalization is $45 million.  I like the P/E ratio of 12.43. Their 52 week range is $2 to $4.46, so at the current price of $2.18 they're near their 52 week low. Spark Networks has a GREAT internet dating property in JDate and I get the impression they're working hard to innovate and monetize better. They've acquired Minglematch, Hurrydate and Engage in the past and have been winding down American Singles for a long while, and focusing on becoming a niche network. They're dumping the remnants of the Engage.com traffic over to their new shiny toy, Kizmeet.com, an online matchmaking service. 

Irena and I will be buying IAC, Jumbuck and Yahoo in the next few weeks to build out our iDating portfolio a little more.  We'll let you know who tanks and who does well, and how we think they can do better.

Comments

[Jonathan Crutchley]

I made some money in PlanetOut, Inc. stock earlier this year, just before they were acquired. Bought for 21 cents a share and got out for 27 cents a month or two later.

[Marc Lesnick]

I've learned to watch Stochastics. Baryz, the famous trader, taught me that. Stochastics, Stochastics.

http://finance.yahoo.com/echarts?s=lov#chart12:symbol=lov;range=1m;indicator=volume+stochasticslow;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

You buy when the Red line on the bottom chart is below the blue line. You sell when the Red line is over the blue line.

According to Yahoo's stochastics for LOV, now appears a good time to buy, but......the Red line has just crossed the blue line. Given it is at its low, it is a safer bet, but LOV could still turn south to become a penny share stock, which would.......for Spark Networks, basically....suck.

On the positive side, VOL's market cap ($46 Mil) is below their Annual Revenues ($50 Mil). They also have $10 Mil in cash. Which means, if you bought the company today publicly for $46 Mil, you get $10 Mil back from the company's coffers, making the realistic sale at $36 Million.

Unless a major competitor with teeth in the Jewish dating market is making moves against JDate, Spark Networks could stand to perform very well in the long run.

For Spark Networks.... I strongly suggest they give their Wall Street PR Firm a very hard and swift kick in the pants. I have seen many well performing profitable internet firms trading in the penny region with trade volumes in the doldrums. Despite the clear financial benefit of the stock, some companies are neither known nor popular among traders and buyers of stock. A Financial PR firm's job is to make sure that does not happen. Spark Network's PR firm has not been contacting the right people or enough people on Wall Street so that they avoid falling victim to the Penny Stock Syndrome.

Marc Lesnick
Conference Organizer
Internet Dating Conference

[Dennis Yu]

Mark,

I hope you make money here! It's almost not fair being an industry insider, but also awesome that you disclose your position.
;)

Dennis

[Mark Brooks]

We don't have enough small cap holdings to round out our portfolio so investments in Spark, Jumbuck, and Meetic will help round out our portfolio for us.

Holdings these companies will help increase our motivation to get into the numbers and report them to you on OPW. And look deeper still. ;-)

We don't invest in anything that we don't plan on holding for 10+ years. We're long long term investors.

More than anything, this is a show of faith for the Spark Networks management. They seem like very capable people. I was recently quoted in Wall Street Journal as saying 'I live in hope for Spark Networks.' I meant it. And I just put my money where my mouth is. ;-)

[Mark Brooks]

The CEO of Snap Interactive pointed out to me that I shouldn't forget about them.

http://www.google.com/finance?q=stvi

[David Evans]

I recently spent a hour on the phone with a potential acquirer of Spark Networks.

Red lines, blue lines, PR and faith mean little unless you understand the fundamental drivers and mentality of the executives at a given company. I don't want to get into it here but there are a number of reasons why Spark is trading so low.

Mark, holding positions in public dating sites is going to raise even more eyebrows. There is nothing like financial motivation to promote companies on your blog and the Wall Street Journal. I don't hold stock in any dating sites for just that reason.

[Mark Brooks]

Just putting some skin into the game ;-) I'll be fully disclosing all positions. I'll be putting $5k each in all the public idating companies in the next several weeks. Then OPW will have a portfolio of dating sites. No preference for any particular one of them. I'm going to pick them ALL up. And report on them ALL.

If you're calling me on integrity. I must turn the tables on you. Why on earth would you mention that you spent an hour on the phone with an acquirer. I'm sure neither the acquirer or Spark appreciates that disclosure.