Cupid’s love affair with online dating is over after tussle with TinderComments Off on Cupid’s love affair with online dating is over after tussle with Tinder
It ends all involvement in online matchmaking for the company as the shares plunged 32.3% to 17.3p.
The firm behind Cupid.com and uniformdating.com lost out to the growth of fast smartphone dating apps such as Tinder, as time-poor singles prefer on-the-move dating rather than wading through dozens of online profiles.
Last year Cupid revealed a £7.4 million underlying pre-tax loss and said the losses were continuing unabated. A £2.8 million loss was posted for the six months to end of June alongside a fall in revenues.
It said: “Through the course of the first half of 2014 it became clear that the pace of change in the industry was increasing; innovation with mobile and intuitive apps is accelerating as they gather momentum and scale.”
The board initiated a review of strategic options available to the company to “maximise value for shareholders and arrest the cash burn” after recognising it would not break up when expected.
It added: “All options available to the company were considered, including further cost reductions and the disposal of certain subsidiaries or assets to aid streamlining… the best course for shareholders is to seek a buyer for the traditional dating assets.”
The listed firm will still exist as a shell company called Castle Street Investments, named after the Edinburgh street where the company is based, and will have around £18 million to use.
Bosses will call in the money owed by Grendall, which bought Cupid’s casual dating businesses last year for £45.1 million. Around £20 million from the deal is outstanding and due to be paid in two years, but Cupid will take a reduced £12.5 million to get it a year earlier.
Grendall, registered in the British Virgin islands, owns a portfolio of online dating sites and is managed by Cupid co-founder Max Polyakov. The remaining websites will be sold for £3 million to other British Virgin Islands businesses Tradax, Together Networks Holdings Limited and Together Networks Limited, which own loveaholics.com and spicychats.com.