Activist hedge fund Kerrisdale Capital has taken a short stake in Match Group (NASDAQ: MTCH). The online dating operator owns Tinder and Match.com. The activist fund expects that shares will fall due to increasing threats around government regulation and intervention.

“The thrill of the unexpected should be confined to going on a new date, not investing in the company that helped you find it,” said Sahm Adrangi, the hedge fund’s founder in an interview with Reuters.

The firm confirmed that it is short Match. Adrangi said he expects the stock price to be “worth less.” However, he did not set a price target for the stock.

Why Kerrisdale Capital is Short Match Group

Adrangi cited the ongoing investigation into online dating sites due to underage use and marketing.

The Federal Trade Commission sued Match Group in 2019 for what it called “deceptive or unfair practices.”

The agency alleges it engaged in these practices to attract new subscribers.

Adrangi published a 26-page letter on its site that details its concerns about Match Group.

“Federal investigations not only mean soaring legal costs and potential legal damages but more importantly, they will likely result in a lasting impact to Match’s business model,” it says.

Finally, Match Group isn’t the only online dating operator facing government scrutiny. The U.S. House Oversight and Reform subcommittee has also sent a list of questions about policies to Bumble, Grindr, and the Meet Group.

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