15 July 2013 – sale of casual dating businesses
The sale of a number of casual dating sites has been sold for a total consideration of £45.1m to a company managed by Max Polyakov, co-founder of Cupid. Part of the proceeds will effectively be paid for with Polyakov’s 12.4 million Cupid shares at a price of 73.2p per share. This leaves Cupid as a well-funded business concentrating on mainstream and niche sites although more than half of profits were generated from the racier casual sites last year. On balance this is a positive step given the uncertainty surrounding the business in recent months. The fact that significant short positions remain open and there are now less than 71 million shares in issue means that a bear squeeze could be on the cards. We rate the shares as a SPECULATIVE BUY.