Investing.com - Can't buy me love, Match?
Match Group (NASDAQ:MTCH) shares are down 2.6% after the Federal Trade Commission sued the owner of Match.com, Tinder, OKCupid, PlentyOfFish and other sites, alleging they used fake love ads to entice users to buy subscriptions.
Match lets users create Match.com profiles free of charge. But a user can't respond to messages without upgrading to a paid subscription. Match would send emails to users saying someone had expressed an interest in meeting them. "You caught his eye" has been a typical tagline.
That would lead to offers to connect users to the senders for a price, the FTC said. But many of the contacts provided by Match or its sites came from users the company already knew were scammers or fraudulent, the FTC alleges. That left the subscribers exposed.
In a statement, Dallas-based Match called the lawsuit "completely meritless," adding that "(f)raud isn't good for business." The company said it catches 85% of improper accounts within four hours and 96% within a day.
Match operates in more than 42 languages across 192 countries.
Match shares already were under pressure. They peaked at $95.32 in August and have fallen 25% since. But they're still up 67% on the year.
The company went public in November 2015 at $12 and has been profitable. Analysts tracked by Investing.com expect the September quarter to show 43 cents a share in earnings on revenue of $541 million, up from 39 cents a share and revenue of $444 million a year earlier.
The company carries more than $1.6 billion in total debt against about $210 million in equity.
In the June quarter, Match earned 43 cents, a penny better than the estimate, on revenue of $498 million. But earnings growth isn't nearly as fast as revenue growth.