Cupid confused by recent plunge in shares, broker blames blogger

Cupid, the internet-based dating operator, released a statement on Friday saying that it doesn't know of any reason for recent fall in its share price - the stock has fallen almost 23 per cent in the past week.

Cupid, the internet-based dating operator, released a statement on Friday saying that it doesn't know of any reason for recent fall in its share price - the stock has fallen almost 23 per cent in the past week.

In a statement Cupid said: "The company is aware of a consumer radio programme investigating the online dating world. Cupid is currently co-operating fully with the programme makers to respond to their questions and to clarify that the group only acts in a legal and appropriate manner."

It also confirmed that it is trading in line with expectations and said that at the year-end had around £14m cash on its balance sheet.

The company's house broker, Peel Hunt, blamed short sellers as well as an important online blog.

Analyst Paul Morland made the following comment: "Unfortunately, the Cupid share price is susceptible to scare stories and one blog in particular has done some damage this week. We are confident that nothing has happened in the last month to undermine the buy case and investors should use this unjustified weakness to top up holdings.

"With sites such as BeNaughty.com there is always going to be ammunition for scare stories around Cupid. We have examined the one that appears to have damaged the share price this week. We can find little new, many inaccuracies and nothing that concerns us. In fact, the focus on traffic rather than registrations appears to miss the point and many of the charts in the article show traffic picking up in January, as would be expected, after a steady drift lower during 2012.

"The article concludes that Cupid is overvalued based one analyst's sales forecast for 2013 of £111m. Our own forecast is 10% below this which suggests the chances of us downgrading are remote. Furthermore, based on recent news from industry peers, we see no reason to believe that trading in January has not been in line with our expectations."

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Oil producers are back at their Covid-19 lows – is it time to buy?
Oil

Oil producers are back at their Covid-19 lows – is it time to buy?

With demand for oil hammered by Covid-19 and talk of “peak oil demand”, there are lots of good reasons to be bearish on oil producers. So, asks John S…
22 Sep 2020
IAG's share price is ready for take-off - here's how to play it
Trading

IAG's share price is ready for take-off - here's how to play it

The owner of British Airways has had a turbulent year, but is now worth a punt. Matthew Partridge explains the best way to play it.
8 Sep 2020
Will a second wave of Covid lead to another stockmarket crash?
Stockmarkets

Will a second wave of Covid lead to another stockmarket crash?

Can we expect to see another lockdown like in March, and what will that mean for your money? John Stepek explains.
18 Sep 2020