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

Most Popular

Forget austerity – governments and central banks have no intention of cutting back
Global Economy

Forget austerity – governments and central banks have no intention of cutting back

Once the pandemic is over will we return to an era of austerity to pay for all the stimulus? Not likely, says John Stepek. The money will continue to …
15 Jan 2021
The MoneyWeek Podcast: bitcoin special
Bitcoin

The MoneyWeek Podcast: bitcoin special

Merryn talks to bitcoin experts Dominic Frisby and Charlie Morris to get the lowdown on the cryptocurrency to find out why it's such a huge global phe…
15 Jan 2021
A simple way to profit from the next big trend change in the markets
Investment strategy

A simple way to profit from the next big trend change in the markets

Change is coming to the markets as the tech-stock bull market of the 2010s is replaced by a new cycle of rising commodity prices. John Stepek explains…
14 Jan 2021
Free 6 issue trial then continue to