IAC holds 83 percent of the shares. The company is currently considering another spin-off from ANGI.
Vimeo is a video hosting platform for business use which is used as an alternative to YouTube by 150 million registered users and 1.2 million paying customers, especially in the B2B environment. Vimeo achieved around 200 million sales in 2019, growing at 20-25 percent p.a. and would therefore be an IPO candidate in the medium term.
Dotdash is a digital media company that reaches over 35 percent of the US population through its group of diverse internet services with 90 million MAUs. Sales are also estimated at around $ 200 million.
Almost at the same time as the Match Group spin-off, IAC announced the acquisition of NYSE-listed Care.com for approximately $ 500 million. The company operates the world’s largest online platform for arranging home care. Care.com has not been able to convert its great potential in a huge market into corresponding economic success in the years since the IPO in 2014.
The strategic development of the company under the new management, including international expansion through further takeovers, should be a focus for IAC in the coming years. I wouldn’t be surprised if we saw another spin-off from Care.com in 5 to 10 years – at a significantly higher company value.
Holding structures often act as a brake on the development of individual portfolio companies, as the interests of the controlling group must always be taken into account when making strategic decisions. This necessity of sometimes “lazy” compromises is one of the reasons why, with The Digital Leaders Fund, we generally don’t like to invest in holdings, but rather in operationally focused individual companies.
We see the separation of the Match Group from IAC as positive for both companies. We have to keep an eye on Match Group’s temporarily high debt after the spin-off. The greatest risk for the company would be e.g. Weakness in free cash flow caused by external factors such as Corona. We are currently not seeing any decline in app usage at Tinder & Co.
Due to the split and a 30 percent correction in the course of the Corona crisis, the IAC share becomes more interesting. Because the future largest investment ANGI Homeservices currently appears undervalued and should also benefit from a possible spin-off. Vimeo is a real pearl in the portfolio. And Care.com could be the next big thing.
We will continue to closely monitor the process of cutting the cord from the IAC Match Group in the coming weeks and months and, in particular, analyze the intrinsic value of the IAC more closely.
If you want to follow up IAC and the Match Group together with us in the future, you can order our free newsletter here now.
Stefan Waldhauser worked in the high-tech industry throughout his professional life. He founded his own software company, internationalized it and sold it to Silicon Valley a few years ago. The business mathematician has been successfully investing in stocks for 30 years and is co-founder of the Digital Leaders Fund.
If you want to join the Match Group, would it make sense from your point of view to buy IAC shares or MG directly?
There are different opinions and good arguments for both sides … here in the DLF portfolio we currently hold shares in the Match Group.
The spin-off has now taken place? Or why match is currently not tradable with us in DE and you know how this works with the choice between $ 3 and shares.
Greetings and thanks
We generally trade shares directly on our home stock exchanges; the right to choose was exercised in advance of the transaction. Investors who are invested in the DLF do not, of course, have to worry about it.
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#Livongo and #Teladoc want to merge and create a leading #DigitalHealth company. What does the merger mean for investors and what will happen to the #shares next? Here is the analysis by @stwboerse.