Match Stock On The Rebound After IAC Split

Match Group will spin off from parent company InterActiveCorp

by Patrick Martin

Published on Dec 19, 2019 at 9:59 AM

Breakups can be difficult, but Match Group Inc (NASDAQ:MTCH) seems to be doing just fine. Match Group stock is up 3.4% to trade at $73.68, after the Tinder app owner announced it will spin off all from parent company InterActiveCorp (IAC). The transition will be complete by the second quarter of 2020, with MTCH shareholders receiving one share of separated Match and $3 per share in consideration, while IAC will get $3 per share in cash.

After finding a floor at the $68 level, Match stock is poised to take out its 80-day trendline today for the first time since early October. The shares are now up 70% year-to-date, but remain a ways off their Aug. 7 record high of $95.32. 

A short squeeze is ready to fuel additional gains. Short interest fell off by 2.2% in the two most recent reporting periods, yet a whopping 58% of MTCH's total available float is sold short. At the stock's average pace of trading, it would take over 14 days for shorts to buy back their bearish bets. 

Options traders are reacting to today's split. In just the first hour or so of trading, 1,541 calls have changed hands, 16 times the average intraday amount, and 15 times the number of puts traded. The March 80 call is popular today, as is the December 75 call.

Whatever the motive, the equity's Schaeffer's Volatility Index (SVI) of 34% sits in the 3rd percentile of its annual range. This means the stock's short-term options are pricing in extremely low volatility expectations right now. 

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