IAC unmatches Match Group (and the break-up is benefiting both stocks)
Mutual split... Holding company IAC and its Tinder-owning subsidiary Match have agreed to separate. Quick refresher: holding companies own enough stock in other companies to control their management. After a 20-year relationship, IAC will spin off Match into its own single independent company. Here’s what shareholders get:
- It's amicable: IAC and Match stocks both jumped 8% on the conscious uncoupling.
- So who gets the couch?: More than half of IAC's revenue comes from its 80% ownership of Match. IAC shareholders will become owners of the new Match, and Match shareholders will too (plus they'll get a $3 bonus per share). Everyone's happy in this complex deal.
We had some great times... but we're ready to move on. IAC has already spun off 6 companies (worth $58B total today). It invested in Match in 1999, back when it was a little fish in a new online dating pond. Since Match IPO'd in 2015, shares have surged over 400%. IAC profited, and now it's time to move on to its next investment relationship.
It's like Venture Capital, for the rest of us... Kind of. If you don't have million-dollar net worth to be an accredited investor, you probably can't invest in pre-IPO companies. Like a VC, IAC takes risks investing in smaller companies (like digital media brand Vimeo) that may (or may not) pay off. Unlike a VC, any retail investor (like you or us) can invest in publicly-traded IAC — and benefit if its bets pay off (like Match did).