OPW - July 29 - Max Polyakov, the former CEO/co-founder of EasyDate/Cupid, picked up BeNaughty.com and Flirt.com from Cupid.com two weeks ago for a cool 43.1m GBP / 50m Euros. The market reacted favorably but the 7% bump-up was short lived. The 52 week high was 212p. Cupid's stock took a beating in Q1 and leveled off in April. Now its at ~65p. It's still up slightly after Max stripped out Cupid's casual dating sites. The current price values Cupid at about 5x earnings.
Meanwhile, the price and payment terms seemed quite favorable for Max at ~4x 2012 EBITDA with the bulk of the price paid over a period of more than 3 years. Anyone want to call Max a sweetheart? But the reality is, this is indicative of how few buyers there are for properties with adult themed content versus mainstream dating properties.
My experience has been that buyers want to pay 2-5x EBITDA for iDating companies. Sellers want 6-12x. Never the twain shall meet. Unless Match is buying.
So lets have a quick look at how the public iDating companies are being received by the investment community. Here they are in pecking order by YOY stock growth.
Spark Networks - at $5, grew most of the year and is now growing towards $9
Jiayuan - at $5, now at $6
IAC / Match - peaked at $53 and went down. now low $50 range again
Meetic - rose to 12 euros last July. then to 13+, now back to just under 12
Meetme - at $2, rose to $4+, then slid back to under $2
Snap Interactive - at $1.40, slid to 40c, now at ~90c
FriendFinder - from 90c to 30c
Cupid - from 200p, now down to 65p
Spark Networks recent rampant success is fueled by hope. Hope (and PR) is powerful, and massive media marketing to a group of people of faith (ChristianMingle.com) should help to bolster this performance stock for the short to medium term.
Unfortunately it seems my best advice to you right now would be...sure, go ahead and invest your careers in Internet Dating but stash your cash under your mattress. Your comments please.