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IAC CEO Says Match Group Can 'Stand On Its Own'

IAC CEO Says Match Group Can 'Stand On Its Own'

IAC/InterActiveCorp (NASDAQ: IAC) said in conjunction with its second-quarter results Wednesday it is exploring a move to distribute its stakes in Match Group Inc (NASDAQ: MTCH) and ANGI Homeservices Inc (NASDAQ: ANGI) to shareholders. 

What Happened

IAC owns an 80% stake in Match Group, the parent company of multiple dating apps including Tinder. The company also owns an 83% stake in Angi Homeservices, the digital marketplace company with brands including Angie's List and Handy.

On Thursday, IAC CEO Joey Levin told CNBC in an interview that the company has spun off around nine businesses to shareholders over its 15-year history.

A move to divest the stakes in Match and Angi Homeservices shouldn't be seen as anything new, he said. 

"Now may be a good time to [divest Match]," Levin said. "We started to think about that in Match and we said, well, if we are going to do Match, do we then start thinking about Angi?" 

Match continues to perform "phenomenally well" and can now "stand on its own," he said. The dating app business is dominating the IAC story in a good way, but the downside is that it is "casting a shadow" over the other business properties, the CEO said. 

Why It's Important

One of the considerations in spinning off assets to shareholders is to improve IAC's valuation, Levin said.

Taking a look at the numbers makes this thesis apparent, as IAC holds $27 billion in cash and liquid security through its ownership stakes. IAC's stock trades at a $22-billion valuation, which implies that a $5-billion discount valuation can be unlocked.

What's Next

Using baseball metaphors, Levin said the exploration process is merely in the "bottom of the first" inning.

IAC shares were down 3.96% at the time of publication, while Match Group shares were down 7.08%. 

Related Links:

2 Analysts Turn Incrementally Bullish On IAC InterActive

IAC/InterActiveCorp Reports Q2 Sales Beat

Photo courtesy of Tinder. 


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