Photo Credit: Facebook/ Tinder
Match Group shares turned sharply lower in Thursday trading after Facebook announced it would be expanding its dating service into the US, raising the prospect of a major competitor to the operator of the Tinder app.
Shares opened higher but subsequently fell as much as 7 percent, putting the company on track for its biggest one-day decline since December. IAC/InterActiveCorp -- which last month said it was considering a spin-off of Match, one of its publicly traded subsidiaries -- fell 4.6 percent.
Facebook's dating feature was first unveiled in 2018 and prior to its US launch it has previously been tested in 19 other countries. According to data compiled by Bloomberg, slightly more than half of Match's 2018 revenue came from the US.
Despite Match's share-price drop on Thursday, Bloomberg Intelligence wrote that there was "limited risk" for the company from Facebook. The company's apps, particularly Tinder, "should continue to gain subscribers and mind share, despite Facebook's latest ploy to deepen penetration in the dating market," analyst Seema Shah wrote to clients.
Earlier on Thursday, SunTrust Robinson Humphrey upgraded the stock to buy and lifted its price target to the highest on the Street.
"We expect Tinder to once again print one of its best quarterly net adds ever" in the third quarter, and it has "further headroom to grow," analyst Youssef Squali wrote to clients.
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