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(Nasdaq: IACI)
Interactive Corp (IACI) is a leading media and Internet company. The company is
organized into four segments: The Match group, Search & Applications, Media, and
eCommerce.
Media: Vimeo
eCommerce: HomeAdvisor
Investment Thesis
Sum of the Parts analysis that is
used by the street does not
acknowledge the value of Tinder,
giving us a free option
(In
Millions)
Search
&
Applications
The
Match
Group
(ex-
Tinder)
Media
eCommerce
Sum
of
the
Parts
EV
Current
Enterprise
V alue
2015
EBITDA
322.0
264.9
Revenue
203.5
481.7
2018 EBITDA
Multiple
5.0x
10.0x
2.0x
2.0x
1,610
2,649
407
963
$5,630
$5,900
Investment Thesis
Tinder has grown to ~50 million users,
and grew 300% last year
International users represent 2/3 of user
base
Tinder is 50 times larger than the next
app or dating website
Online dating is here to stay. In words that it may be easier to understand for
investment professionals: it brings liquidity to the market.
Once you use Tinder you will always use dating sites to find someone
The question is: which app or website will win?
Spoiler alert: IAC dominates the market
2015
59.7
2016
95.5
2017
127.1
2018
148.4
133.4
$193.1
241.8
$337.3
360.2
$487.3
480.6
$629.0
2015
61
3%
$219.6
2016
108
3%
$389.6
2017
159
3%
$570.9
2018
206
3%
$741.4
Note: The 3% will join Tinder for the sole purpose of Tinder Travel. I.e. Cheating Chad will only download Tinder
for his escapades and not part of the normal user base. This is a huge base that no analyst has mentioned.
2014A
533
771
(238)
2015
1,220
836
384
2016
2,165
906
1,259
2017
3,172
982
2,190
2018
4,119
1,064
3,055
($54.8)
$86.7
$284.0
$494.1
$689.2
2015
$0.33
2016
$1.00
2017
$1.50
2018
$2.25
$25
$126
$258
$485
Valuation
Most likely there will be a mix between
bull, base and bear case in several
categories
mangelo@Wharton.upenn.edu
2013
4
9
Bull
Base
50
3.6%
4.0%
18%
3%
$3.00
2,361
23,613
$17,710
20%
Bear
40
2.5%
3.0%
22%
2%
$2.25
1,272
12,722
$9,542
40%
2016
30
1.4%
2.0%
25%
1%
$1.50
476
4,762
$3,572
40%
$8,787
2017
2018
37
97
46
136
52
177
13
40
82
134
183
229
NA
Growth
International
Growth
~700%
~700%
300%
300%
85%
115%
50%
70%
25%
40%
12%
30%