Spark Networks, owner of JDate, Christian Mingle, as well as other dating internet sites, is dealing with an intense activist campaign because of the hedge investment Osmium Partners, that will be seeking to unseat the board and force a purchase for the company that is troubled.

Then Spark Networks, owner of JDate, Christian Mingle, and a handful of other niche dating sites, is about to get its heart broken if love is a battlefield.

Osmium Partners is practically particular to win the four board seats it is gunning for when Spark holds its yearly shareholder conference in a few days, sources knowledgeable about the problem stated, allowing the activist hedge investment to take close control and force a purchase associated with the business. Initially planned for June 17, Spark has recently delayed the meeting that is annual June 28, a move these sources stated is directed at purchasing Spark more hours to rally investors to vote down Osmium’s proposal or preempt a forced sale by securing its very own buyout offer.

A agent for Spark, which trades underneath the “LOV” stock ticker, declined to comment beyond citing the business’s general general general public filings.

Osmium, which has 15percent of Spark, established its proxy battle in December 2013, citing just just just what it claims are Spark’s bad business governance, payment concerns, and decreasing stock cost. The hedge investment additionally alleges that Spark has mismanaged JDate, its “crown jewel,” and that its networks that are christian been underperforming relative to their online dating sites peers.

The market and shareholders seem to have actually fallen right out of love with “LOV. at a per share price of around $5, a almost 50% decrease within just per year” As Osmium waits to see whether voters will think its four board nominees certainly are a match, here is a review of a number of the hedge fund’s other gripes with Spark, centered on a presentation it offered to shareholders in might:

Too little rebranding and marketing strategy that is poor.

Osmium stated with its presentation that Spark has neglected to rebrand JDate, which, along side Christian Mingle, has taken into account 95percent of this business’s income since its inception 17 years back. Spark just got around to rebranding JDate in this present year’s very very first quarter, and its own Chairman and CEO Greg Liberman also conceded to the failure on its very first quarter 2014 earnings call, where it reported its subscriber numbers that are slowest since 2006.

In addition, the advertising regarding the JDate rebranding, as well as for Christian Mingle, has fallen brief as well as the organization’s paying for these endeavors has received serious repercussions, based on Osmium.

“Spark’s ‘media strategy’ can be a unverified and distraction that is immaterial the business’s core, high-margin premium dating business,” Osmium composed in its presentation. “These interruptions beyond your core that is scalable have actually generated $29.4 million in fixed overhead supported by just $69 million in income. This has lead to Spark earning cash per worker that is 71% less than competitors Match.com, eHarmony and Zoosk.”

Failure to innovate.

Osmium also claims that Spark has neglected to innovate and remain competitive through the development of “add-ons,” or features beyond the standard dating internet site solutions of profile creation and use of a database. The hedge funded cited HowAboutWe for partners and “featured profiles” on eHarmony and OKCupid as samples of brand name add-ons which have strengthened profitability at these websites.

Management that is “pleased” with bad outcomes.

Despite profits misses and a decreasing stock cost, Osmium contends that Spark’s administration is delusional with regards to the business’s financials.

“We think Mr. Liberman has utilized your message ‘pleased’ no fewer than 20 times on profits telephone telephone telephone calls explaining the business’s outcomes over the past eight quarters,” Osmium’s presentation states. “Over this time around duration, the organization has created over $32 million in net LOSSES — 30% for the economy limit.”

Spark administration can also be perhaps perhaps not placing its cash where its mouth is whenever it comes down to spending into the company.

“Management and Board have actually restricted money at an increased risk in outright stock ownership,” Osmium stated. “Excluding commodity they received at no real cost to by themselves, administration while the Board collectively possess just 0.2% associated with the business.”

Mariah Summers is company reporter for BuzzFeed Information and it is located in ny. Summers reports on hospitality, travel and property.