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I can’t believe I haven’t posted about this, must have been too much eggnog during the holidays. Mining/holding company Mountains West have announced their intention to merge Together, The Right One and eLove to create an off-and-online dating powerhouse.
Nothing says “we care deeply about creating long-lasting relationships� than being bought by a mining company involved in coal bed methane in the South Central Colorado region.
Markus calls it a the beginning of a big dating site rollup. I couldn’t disagree more. I’ve been hearing that terms used for years, and it never happens. The money men didn’t swoop in when the going was good, why would they start now?
I read about Meetic buying Mountains west outright or eHarmony buying up shares and I scratch my head. I’m not a finance guy but I can’t believe that’s how major dating sites are going to drive traffic and leads in 2007. Especially when they are used to spending $50-$90 million a year on mass marketing.
The saga when Think Partnership Sold Dating Subsidiaries in March 2006.
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With a reverse merger in a shell company, the thing that will matter most is liquidity. I’m sure the float is pretty closeley held, so the acquirer’s will pretty much guide the price at the beginning. But the stock price is irrelevant if it doesn’t trade reasonable volume at that price. So the big question is, “Will they get volume at a significant price or will it be thinly traded?” If they get serious volume, then stock as a currency could become enticing to a major player. If it does not see a lot of volume, then it is more probable to see their likely acquisition targets being much smaller operations then eHarmony and Meetic. Although I would say that acquisitions are imminent as news can help liquidity.
I am confident that they have the team in place to grow profits organically, but acquisitions surely can expedite the process. It’s no secret that the problem roll ups historically face is that even when making acquisitions that should be accretive, the stock price very often goes down. That being said, they have a strong and stratecically thinking team in place and I am sure they have a solid plan for moving forward. It’s exciting to see the bricks and mortar side finally getting some accolades.
Thanks!