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Tinder Unmatches With CEO & Metaverse
The way people meet and interact with each other has changed considerably since the 2000s. The internet gave rise to online companies that tapped into this new way of helping people stay connected and explore shared interests.
Facebook focused on solidifying existing relationships. Myspace was designed to enhance creativity. Twitter was built on sharing thoughts. But there was another branch of internet companies focusing on dating.
Tinder is a standout example. It has arguably been at the forefront of optimizing dating, so much so that the app’s lingo that’s become a part of the everyday life of GenZ and Millenials.
The dating platform has close to 11 million active subscribers and drives revenue from premium plans, features, coins, and more.
The company that owns Tinder, Match Group (ticker: MTCH), has been building its business purely through a portfolio of online dating platforms. Match Group’s star asset is, without a doubt, Tinder.
But something’s changing. Match Group announced its earnings for Q2 2022 and major changes this week, shortly after which the company’s stock crashed from $76 to $60 in after-hours trading. Highlights include:
|Revenue||$795 million||$804.22 million|
|Revenue Forecast (Q3)||$790 million-$800 million||$883 million|
Match Group CEO Bernard Kim revealed in a shareholder letter that Tinder’s performance over the last few quarters has been below expectations due to a mix of slower than usual growth combined with hit and miss features.
The consequence? Tinder CEO Renate Nyborg is set to exit the company after less than 12 months at the helm. That’s not all. Tinder’s planning to scale back and even remove two broad features:
- Tinder Coins: In-app currency that was supposed to be leading to a virtual economy
- Metaverse Dating: Avatar-based matchmaking and interactions in the metaverse
Match Group was planning to use Hyperconnect, a recently acquired social platform, to build a new and never before seen dating experience for the metaverse.
But given the uncertainty surrounding metaverse technology and web3 in general, Match Group has decided to avoid investing in the futuristic dating experience.
On the other hand, Tinder Coins has supposedly been a miss, not a hit like other features Tinder has launched in the past. All of this means that Tinder’s financials for Q2 2022 were (quarter-on-quarter):
- Revenue: +13%
- Subscriber growth: +14%
- Revenue per payer: -1%
Crude Oil is Falling; Gold is Rising
If you haven’t heard, the term recession has been thrown around often over the past few weeks. Whether we’re in a recession is still up for debate. But commodities like Crude Oil are definitely feeling the heat.
To simplify a complex situation, the supply and demand of Crude Oil have been haywire for the past few years. The Russo-Ukraine war made matters worse, as Russia simply scaled down oil exports.
Bad news for everyday Joes. Good news for traders and energy companies. Crude oil prices reached record highs, leaving many sweating over the thought of an impending energy crisis. But here’s the twist.
OPEC+ members met on Wednesday and decided to increase their output by 100,000 barrels per day in September. This will serve to somewhat ease the energy supply crisis that the world is facing.
At this point, you may be wondering what OPEC+ or Organization of the Petroleum Exporting Countries Plus means. It’s an association of major oil producers that includes the likes of:
- Equatorial Guinea
- The Republic of the Congo
- Saudi Arabia
- United Arab Emirates
These countries account for close to half of the world’s oil production. The increasing recession fears combined with steadily growing oil reserves in countries like the US means that the price of Crude Oil is dropping.
That said, there’s one commodity that’s shining – India’s favorite yellow metal Gold. Gold means many things to people. To some, it’s sentimental – holds a value that’s passed on through generations.
For others, it’s an opportunity to hedge against inflation, recession, and falling equities. The recent spike in Gold prices, experts believe, is due to the fear of recession.
Some even suggest that the growing tension between US and China over Taiwan could be driving up the price of Gold. Either way, Gold has offset two-month lows, bolstered by relatively weak US treasury yields and currency.
Borrowing Just Got Costlier in India
There was another interest rate hike this week. But guess what? Not in the US! India’s very own Central Bank has increased the repo rate by 50 basis points. This means the cost of borrowing from the RBI is now 5.40%.
If you’re new to the world of finance terms, a repo rate is nothing but the interest rate RBI charges when commercial banks borrow money. If it’s costly to borrow money, the assumption is that people will spend or borrow less.
Interest rates are increased typically to curb inflation but have other implications as well. For example, home loans offered at floating rates become costlier.
Before the pandemic began, RBI’s repo rate was at 5.15%. RBI cut the repo rate by 115 basis points (cumulative) and brought down the cost of borrowing to a measly 4.00%.
Central banks cut interest rates when they want to add liquidity to the market. But the devil is in the details. Low interest rates mean people are not incentivized to stash money in the bank.
Instead, they may spend aggressively and drive up the prices of goods and services. However, the world and India have been struggling with surging inflation that RBI’s Governor described as “above comfortable levels”.
As a result, the RBI has been forced to hike interest rates for the third time this year.
- 1st hike: 40 basis points (4.40%)
- 2nd hike: 50 basis points (4.90%)
- 3rd hike: 50 basis points (5.40%)
Meme of the Week
Your Weekend Entertainment
Dhan Podcast🎙️ ft. @Kirubakaran Rajendran – Founder @Square Off