Happy Wednesday!

Apologies for the late issuing of the MFM by email the past two days! It has been due to technical errors outside of our control.

📝 Focus

• “It Starts with a Swipe”

📊 In the Markets

• Uber drop-off

• AMD big 2Q drops… but… AI!

📖 MoneyFitt Explains

🎓️ After-Hours Activities

📝 Focus

It Starts with a Swipe

Tinder parent, Match Group’s shares jumped 10% in after-market trading🎓 after the multiple dating app company clocked in better quarterly revenues and profits than expected by Wall Street’s Finest for the second quarter in a row. Guidance for the current quarter was also higher than forecast on strong price optimisation from flexible subscription plans and its successful Tinder Gen Z repositioning marketing campaign “It Starts with a Swipe” which boosted new users and reactivations.

..... ▷ In 2013, Tinder revolutionised online dating with its swipe-based system. It simplified the process but led to more casual hook-ups than lasting connections. Tinder's success affected other dating services owned by its then-parent IAC, like Match.com, Plenty of Fish and OK Cupid. (Match was fully spun off in a 2020 IPO.) In the US, Tinder dominated, but Badoo (now Bumble’s sister company) led in Europe and South America. With over 400 million downloads, Badoo (a quiz and games app that pivoted to dating in 2013) is the most downloaded dating app globally but struggled in the US. Bumble (IPO 2021), founded by Badoo founder Andrey Andreev and Tinder co-founder Whitney Wolfe Herd, succeeded in drawing North American users away from Tinder by marketing it as a feminist app where women make the first move. This shift reflects changing attitudes towards online dating, with apps like Match’s Hinge (“Designed to be Deleted”) focusing on long-term relationships.

..... ▷ Dating apps use the freemium model, where the service and platform are free, but users can improve their chances by paying for either a monthly subscription of various features or through à la carte purchases, including virtual gifts, an approach borrowed from the gaming space. Currently, only slightly more than a quarter of US dating app users pay. Globally, over 300 million people use dating apps, with about 20 million paying for premium features. In 2022, Tinder had 75 million monthly active users (not the same as downloads) and 10.9 million subscribers.

..... ▷ The global online dating market is expected to grow at a compound annual growth rate (CAGR) of 7.4% from 2023 to 2030 to reach USD 17.28 billion by 2030, though forecasts range from low single digits to low teens. This growth is being driven by a number of factors, including the increasing popularity of smartphones, the growing acceptance of online dating and the rising number of single people. But it is a crowded space, with over 8,000 competitive online dating sites and platforms worldwide. Besides Tinder, Match Group owns 22 dating apps and platforms, including Hinge, Match.com, OK Cupid and Plenty of Fish, and owns six of the top 10 dating apps by revenue. Though younger users are more active, the potential upside could be among older age groups in ageing (and increasingly lonely) populations as they have a greater wallet size, propensity to spend and are hence more monetisable. There are several dating apps that cater to older people, including Love Again, Hinge and Match.com.

Also: Men swipe right on 47% of profiles, while women only swipe right on 12%. Globally, about 90% of Match Group users are men. About 91% of opening messages on Match Group's platforms are just one word long (!) 42% of dating app users aim for marriage though only 13% of users get engaged or married from meeting someone on a dating site.

📊 In the Markets

Uber drop-off: The S&P 500 and Nasdaq closed a bit weaker on the first day of the typically slow month of August, as traders digested US jobs data (vacancies down) and a host of earnings reports. After hours🎓, Fitch, one of the Big Three rating agencies, downgraded US sovereign debt from its top "AAA" rating to one notch below that, "AA+" on “a steady deterioration" in governance over the past two decades.

..... ▷ Ride-hailing pioneer Uber dropped 5.7% after missing revenue expectations, despite reporting its first-ever operating profit on Tuesday on the back of better cost controls. This was quite the landmark as Uber’s racked up a total of $31.5bn in operating losses since 2014 after years of massive fundraising and massive spending on subsidising everything in its expensive push for user, driver and geographic growth and to build an unbreachable moat. (Spoiler Alert: It didn’t.)

Also:

..... ▷ Industrial bellwether Caterpillar rose 8.9% on a rise in second-quarter profit but warned of a sequential fall in current-quarter sales and margins.

..... ▷ Pfizer edged lower after revenues more than halved as demand for its Covid-19 products fell sharply. Combined sales of Covid vaccine Comirnaty and the antiviral Paxlovid were $1.6bn in the quarter compared to $11.3bn in the same period last year. That PFE only dipped 1.25% shows that it was largely priced in.

..... ▷ Miller Lite and Coors Lite brewer Molson Coors raised full-year guidance after reporting record quarterly sales helped by the boycott of AB InBev’s former market leader Bud Light. Also priced in, as TAP fell 4.7%.

..... ▷ #3 cruise industry player Norwegian Cruise Lines tumbled 12.1% after forecasting lower third-quarter profit on higher costs

AMD big 2Q drops… but… AI!

Advanced Micro Devices (AMD) traded up 3% in after-market trading🎓 though results were poor, with revenues down 18% year over year with collapsing margins, sending adjusted net income down 44% from year-ago levels.

..... ▷ This was largely from its “client” segment, which saw sales down more than half, with PC demand sharply lower after the pandemic-era surge. Reversion to the secular trend favouring mobile devices over PCs doesn’t help AMD, but they do report that the PC decline has moderated and may be turning back to growth.

..... ▷ Of course, traders are counting on AMD to challenge Nvidia in the most advanced AI chips when AMD releases a competing product later this year. CEO Lisa Su spoke to reporters about a significant increase in AI engagements and plans to ramp up production of their MI300 chips to compete with Nvidia's newest H100 chips.

..... ▷ Microsoft and Google plan to ramp up spending on their cloud business data centres in the second half of the year, with much spending heading into AI chips and infrastructure. Microsoft is believed to be working with AMD on AI chips, as is Amazon’s market-leading AWS cloud business.