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After losing a proxy fight, Sparks Network’s leadership exits.
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Sparks Networks, the parent company of the most popular Jewish dating web site in the world JDate, has a new board of directors. In a shakeup four of the company’s six sitting directors, including its Chairman and CEO Greg Liberman, were dismissed. The move came at a shareholders meeting held in Greenbrae California on July 3rd.
They were replaced by the four candidates from the company’s single largest shareholder, the hedge fund Osmium, which holds a 14.2% stake in Sparks.
Osmium nominees received at least 88% of 19, 931, 427 shares of Spark common stock voted at the meeting.
The meeting was held after Osmium partners filed official notice of its intention to take over Sparks’ board with the SEC on May 1st.
While board member Thomas Stockham was reelected, he chose to step down on Friday.
The leadership struggle came as a result of Osmium’s dissatisfaction with the previous board’s spending of $120 million on a marketing campaign for JDate’s sister site ChristianMingle, while neglecting the more profitable Jewish web site. Osmium was also bothered by what it said was an increase in marketing expenses as a percentage of revenues to 75% in 2013, up from 27% in 2009.
Also, JDate’s revenues for the first quarter declined to their lowest level since 2006 as its subscribers also declined to 2006 levels. All dating web sites are suffering from competition of new dating apps which can be more easily used on mobile devices.
Spark’s stock has plummeted 14.5% so far this year and a total of 35% over the last 12 months
Spark’s new director is Osmium’s founder John Lewis. He said in a statement, “We sincerely appreciate the tremendous shareholder support for Osmium’s slate of nominees. The new board is eager to work alongside Spark employees with a renewed sense of urgency, accountability and focus, in order to drive increased shareholder value. We look forward to Spark’s future and to reporting on our progress in the months ahead.”
JDate has more than 750, 000 members worldwide and takes credit for having arranged more Jewish marriages than all other websites combined. It was established in a West Los Angeles condominium in 1997.
The website declares that its mission is to strengthen the Jewish community and ensure that Jewish traditions are sustained for generations to come. To accomplish this it provides a global network where Jewish singles find friendship, romance and life-long partners within their faith.
While basic membership is free, premium memberships are sold which allow users to contact more people through the site.
Spark Networks owns and operates more than 30 niche-focused online properties, including more than 20 personals sites such as JDate.com, ChristianMingle.com, SilverSingles.com and BlackSingles.com.
The company says its mission is to create iconic, niche-focused brands that build and strengthen the communities they serve. Just before trading broke in America on Thursday for the Fourth of July holiday, shares of Spark closed at $5.68, up slightly less than 1%.
Established in November 2002, Osmium Partners, LLC is an employee owned hedge fund headquartered in Greenbrae, California. It has a long-term track record. Its office is located in Marin County where they focus on investing in high-quality businesses in the under-followed and undervalued small-cap sector of the public equity market. The firm primarily provides its services to pooled investment vehicles.
