Spark Networks, owner of JDate, Christian Mingle, along with other dating sites, is facing a intense activist campaign because of the hedge investment Osmium Partners, that will be trying to unseat the board and force a purchase for the company that is troubled.

Then Spark Networks, owner of JDate, Christian Mingle, and a handful of other niche dating sites, is about to get its heart broken if love is a battlefield.

Osmium Partners is nearly specific to win the four board seats it is gunning for when Spark holds its yearly shareholder conference a few weeks, sources acquainted with the problem stated, allowing the activist hedge investment to take close control and force a sale of this company. Initially scheduled for June 17, Spark has delayed the yearly conference until June 28, a move these sources stated is directed at purchasing Spark more hours to rally investors to vote down Osmium’s proposal or preempt a forced sale by securing its buyout offer.

A agent for Spark, which trades beneath the „LOV“ stock ticker, declined to comment beyond citing the business’s general general general public filings.

Osmium, which has 15percent of Spark, established its proxy battle in December 2013, citing exactly exactly exactly what it claims are Spark’s bad business governance, settlement issues, and decreasing stock cost. The hedge investment additionally alleges that Spark has mismanaged JDate, its „crown jewel,“ and therefore its Christian companies have been underperforming in accordance with their online dating sites peers.

At a per share price of approximately $5, a almost 50% decrease within just a year, the marketplace and investors may actually have fallen right out of love with „LOV.“ As Osmium waits to see whether voters will think its four board nominees are really a match, listed here is a review of a number of the hedge investment’s other gripes with Spark, according to a presentation it provided to investors in May:

Too little rebranding and bad online strategy.

Osmium stated with its presentation that Spark has neglected to rebrand JDate, which, along side Christian Mingle, has taken into account 95percent of this organization’s income since its inception 17 years ago. Spark just got around to rebranding JDate in this present year’s first quarter, as well as its Chairman and CEO Greg Liberman also conceded to the failure on its first quarter 2014 earnings call, where it reported its slowest customer figures since 2006.

In addition to this, the advertising associated with JDate rebranding, as well as Christian Mingle, has fallen brief therefore the organization’s paying for these endeavors has already established serious repercussions, in accordance with Osmium.

„Spark’s ‚media strategy‘ is an unverified and immaterial distraction from the business’s core, high-margin premium dating company,“ Osmium composed in its presentation. „These interruptions beyond your core that is scalable have actually resulted in $29.4 million in fixed overhead supported by simply $69 million in income. This has led to Spark earning cash per employee that is 71% less than rivals Match.com, eHarmony and Zoosk.“

Failure to innovate.

Osmium additionally claims that Spark has neglected to innovate and remain competitive through the creation of „add-ons,“ or features beyond the original dating internet site solutions of profile creation and usage of a database. The hedge funded cited HowAboutWe for partners and „featured profiles“ on eHarmony and OKCupid as samples of brand add-ons which have strengthened profitability at these websites.

Management that is „pleased“ with bad outcomes.

Despite profits misses and a stock that is declining, Osmium contends that Spark’s administration is delusional regarding the business’s financials.

„We believe Mr. Liberman has utilized the word ‚pleased‘ no fewer than 20 times on profits phone phone calls explaining the business’s outcomes during the last eight quarters,“ Osmium’s presentation states. „Over this time around period, the organization has produced over $32 million in net LOSSES — 30% of this economy limit.“

Spark administration can also be not placing its cash where its lips occurs when it comes down to spending when you look at the business.

„Management and Board don’t have a lot of capital at an increased risk in outright stock ownership,“ Osmium claimed. „Excluding investment they received at no real price to by themselves, administration as well as the Board collectively obtain just 0.2percent associated with the business.“

Mariah Summers is business reporter for BuzzFeed Information and it is situated in nyc. Summers reports on hospitality, travel and estate that is real.