May 2, 2025
Trade Idea: MTCH $30.41 (Match Group, Inc.)
Buy May 23rd $33 Calls for $1.20
Trade Idea: MTCH $30.41 (Match Group, Inc.)
Buy May 23rd $33 Calls for $1.20
This idea is quite easy to understand but it requires a bit of “connecting the dots.”
Options Flow
On Thursday, there was significant activity in MTCH upside calls. Specifically, they did the following:
- Buy 5,000 MTCH May 16th $33 Calls for $1.02
- Buy 15,000 MTCH May 23rd $33 Calls for $1.26
- Buy 2,000 MTCH May 23rd $32 Calls for $1.40
Sell 3,000 MTCH May 23rd $37 Calls for $0.33 - Buy 4,000 MTCH June 20th $35 Calls for $1.02
There are several reasons why this is interesting.
- MTCH options generally don’t trade with this type of volume.
- They started buying May 16th calls first, but quickly moved to the 23rd. The May 23rd date is interesting. With earnings due next Thursday, May 8th, why wouldn’t they concentrate on May 16th instead?
- In addition, the CEO is speaking at a JPM conference on May 13th. This is positive to see the CEO speak after earnings. It usually signals a solid report. CEOs often send their CFO or senior management team if earnings are subpar.
- The $33 Calls and the Call spread point to a price near $37-$38.
Now, let’s take a look at the holders list.
Who Owns It?
Starboard Value is an activist firm who took a 6.6% stake in the company last July. They think the stock is undervalued and highlighted ways the company could improve margins.
In addition, another activist firm, Elliott Management, is also in there with a stake that looks like it is just under 5%.
Then, here’s where it gets interesting.
UBS owns about a 4% stake in MTCH through stock and options. Why would an investment bank own that much MTCH?
They likely own it for someone who wants to disguise their true position size in the name as they build a larger stake… like Elliott Management.
Filings
When a fund passes 10%, they need to file with the SEC. The loophole is that they can buy stock through swaps with a bank and avoid the filing until they are ready.
Here's one other key point, 13Fs come out on May 15th. This is where we will learn how the holder’s list has changed. More reason to think the Call buyers should have focused on May 16th Calls. Again… they didn’t.
I suspect they didn’t because Elliott Management may be ready to tell the world they have taken a much bigger stake in the company that exceeds 10% and will be more aggressive in pushing the stock higher with greater “activism.”
If this is the case, they control the narrative, meaning they know exactly the date they will do this. They are also legally allowed to buy calls ahead of this announcement. While it’s “inside information,” they are the source of the inside information, so it’s fine.
The Trade
To recap, there are several upcoming events:
- Earnings 5/8
- CEO at JPM Conference 5/13
- 13Fs 5/15
- Weeks of 5/23… Elliott Announcement?
From the options flow and the chart it looks like they are targeting a move back toward last year's highs.
I like those MTCH May 23rd $33 Calls for $1.20. The Target Stock Price is $37.50.
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