Online Dating Boss Spends 1 Million Pounds on Unloved Shares
LONDON -- The shares of Cupid climbed 3 pence to 120 pence during early trading this morning after the company's boss revealed he had invested 1 million pounds in his company.
Bill Dobbie, Cupid's chief executive, said he had acquired 865,000 shares yesterday at 114.11 pence.
Following such a strong set of results, my commitment to, and confidence in the Cupid business remains as strong as ever. The business is built on solid foundations and we will continue to execute on our growth strategy. We have, and continue to make significant steps to achieve our objective of 1 million subscribers across 25 markets by 2017 and thereby doubling the size of the Company.
On Monday this week, Cupid's 2012 results showed sales up 51% to 81 million pounds and underlying earnings before interest, tax, depreciation, and amortization up 45% to 16 million pounds.
The group also raised its dividend by 33% to 3 pence per share.
However, the shares have been blighted of late by allegations of fake users misleading customers.
Indeed, the price has collapsed 33% since the start of January and now trades at less than nine times 2012 earnings -- a lowly rating, given the profit growth witnessed last year and the fact that sales since 2009 are up nearly tenfold.
Cupid made no mention of the allegations within its recent results, although the firm did say it would spend an additional 2 million pounds to "develop and enhance the quality of consumer experience."
Dobbie's 1 million pound share trade is likely to have been funded by two earlier sales. He raised 4.6 million pounds by selling shares at 110 pence during 2011 and collected a further 6 million pounds during 2012 by selling shares at 180 pence.
Of course, only you can decide whether Dobbie's earlier disposals are more significant than yesterday's purchase, and whether the company's growth record and current valuation indicate a bargain.
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The article Online Dating Boss Spends 1 Million Pounds on Unloved Shares originally appeared on Fool.com.Maynard Paton has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.