Thursday, June 18, 2015

IACI: Why Doesn't Tinder Kindle InterActiveCorp'S Fire?

Interactive Corp Presentation – Long Tinder: IRA Sohn Conference 2015 [Slides]

    This is old news. I'd bit a little shocked if this happened anytime soon (although I could be wrong...they may be desperate to make it happen. If they did try and push it through it would be rather bearish in my opinion, as to me it would suggest Match is about to fall off a cliff and they want to cash in while they can)

    Three problems from my vantage point. 
    One: they have a ton of "unallocated corporate expense" that makes all their segments look more profitable than they really are. If you split the companies up, you probably actually have to add MORE expense (reverse synergies), and you'd have to allocate that corporate expense somewhere. Now, this happens in any split (although I would argue it's way more severe for IACI), so maybe this piece isn't a dealbreaker.
    Second, though, is what you have leftover of core IACI when you do this. It's basically a bunch of junky businesses that are either money losing or declining and secularly challenged. IACI is able to hide some of this via Match profitability.
    Third, by their own admission, Match is in "a transition year." It would be weird to me if they tried to pull off this split during a self admitted transition year.

    It took my breath away a little bit with how much they are charging for Tinder. I'm not sure what to make of it. They must think they have a certain small % cohort who will pay almost anything to swipe. I continue to think Tinder is by far the least efficient way to find a date online.
 "they may be desperate to make it happen. "
I replied: Perhaps they are desperate to make it happen.
Diller is over 73 and per recent photos he looks pretty haggard.
Perhaps someone inside the IAC knows he could die soon, and the IAC could collapse, because he is like a Godfather.

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