ONLINE BARRONS - Sep 18 - JDate, a dating site for Jewish singles, is a
hit with its clientele, but its parent company is a bust with the
shareholders. Spark shares are languishing~$3 a share, amid
disappointing financial results and after a proposed buyout at $3.10 a
share earlier this year by the company's largest holder, Great Hill
Equity Partners, was rejected by a special committee of the board. Spark
shares look reasonably priced, based on the company's profits, solid
balance sheet and JDate's franchise value. Osmium Partners, an
investment firm that owns 6.7% of Spark, opposed the Great Hill bid,
arguing Spark's intrinsic value exceeds $6 a share. "Spark is highly
undervalued, and it would be a nice fit for an acquirer at the right
price", says John Lewis, a principal at Osmium. In 2009, JDate generated
$29M in revenue. While that was 63% of Spark's sales, it's a small
fraction of the $1 billion in annual revenue generated by the online
dating industry, which is dominated by eHarmony and Match.com. In
contrast, general dating sites spend heavily on TV and Web ads. eHarmony
may spend $125M on marketing and advertising, or more than 40% of its
estimated $280M in 2010 revenue. JDate spends as little as 5% to 10% of
sales on marketing and advertising. FULL ARTICLE @ ONLINE BARRONS
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