Earnings Results: Match hits pause on ‘metaverse’ dating and Tinder crypto, stock plunges 20% after surprise loss

by | Aug 2, 2022 | Stock Market

Match Group Inc. shares were pummeled Tuesday after the online-dating company’s new chief executive detailed a slowdown for its most popular product, Tinder, and decided to pause newer initiatives such as Tinder-based crypto and “metaverse” dating. Match
MTCH,
+4.32%
reported a loss of $31.86 million, or 11 cents a share, down from a profit of 46 cents a share a year ago. Revenue grew to $794.5 million from $707.8 million a year ago, but missed analysts’ estimates.

Analysts on average expected earnings of 57 cents a share on sales of $804 million, according to FactSet. Shares fell more than 20% in after-hours trading immediately following the release of the results, after closing with a 4.3% gain at $76.71. A large reason for the surprising loss was a writedown of $217 million on the acquisition of Hyperconnect, an Asian dating company attempting to integrate “metaverse” features. Match paid more than $1.7 billion for the company last year, but new Chief Executive Bernard Kim said that he is slowing down development and spending. “I believe a metaverse dating experience is important to capture the next generation of users, and Hyperconnect has been innovating in this area. However, given uncertainty about the ultimate contours of the metaverse and what will or won’t work, as well as the more challenging operating environment, I’ve instructed the Hyperconnect team to iterate but not invest heavily in metaverse at this time,” Kim wrote in a letter to shareholders Tuesday. “We’ll cont …

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