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Twitter, Match Group Rise After-Hours as Stock Markets Close Flat

By Dan Caplinger - Feb 9, 2021 at 5:50PM

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Action after the end of the regular trading session caught some investors' eyes.

Tuesday was a pretty quiet day on Wall Street as investors consolidated their recent gains. The Nasdaq Composite (^IXIC -4.90%) eked out a small gain to push above the 14,000 mark and further into record territory. However, the Dow Jones Industrial Average (^DJI -3.73%) and S&P 500 (^GSPC -4.21%) fell back slightly from their own record closes on Monday.

Index

Percentage Change

Point Change

Dow

(0.03%)

(10)

S&P 500

(0.11%)

(4)

Nasdaq Composite

+0.14%

+20

Data source: Yahoo! Finance.

After the closing bell Tuesday afternoon, some stocks made moves after announcing news. Twitter (TWTR -3.99%) added to gains in the regular session after reporting its fourth-quarter earnings, while Match Group (MTCH) made gains on optimism over a social media deal of its own.

Twitter finishes 2020 strong

Shares of Twitter rose 1% in after-hours trading as of 4:30 p.m. EST after climbing about 3% in the regular session. The social media company  reported solid results to finish its 2020 fiscal year.

Five young people against a wall with various mobile devices.

Image source: Getty Images.

As many social media players have seen during the COVID-19 pandemic, Twitter saw a big rise in daily active usage that helped to bolster revenue. Sales in the fourth quarter climbed 28% from year-earlier levels, with net income nearly doubling year over year. Average daily active users came in at 192 million, up by 40 million from the same figure 12 months ago.

However, Twitter did raise a few warning bells. Investors shouldn't necessarily count on the growth rates from 2020 continuing into the future. The company issued guidance for revenue of $940 million to $1.04 billion for the first quarter of 2021, and while that's generally ahead of what most investors were expecting, it suggests growth could slow to as little as 16%.

Nevertheless, Twitter is hopeful that efforts to come up with creative new ad formats, improve its audience targeting, and generally boost ad-related revenue should help the stock climb. With shares having doubled since June, Twitter is clearly doing things right in the eyes of shareholders.

Making a Match

Elsewhere, Match Group shares were up as much as 3% after-hours on Tuesday before falling back somewhat. The online dating specialist found a partner of its own in the form of a newly announced acquisition.

Match will acquire South Korean company Hyperconnect for $1.725 billion in cash. Hyperconnect runs the highest grossing video and audio app for one-on-one live chatting in the world, with 540 million downloads since 2014. Another live-streaming app offers numerous features for group video and audio broadcasts.

As attractive as Hyperconnect's current customer base might be, Match also has to be happy about the research and development capabilities that the South Korean start-up brings to the table. As Match CEO Shar Dubey noted, Match will "look to deploy Hyperconnect's technologies across our existing portfolio" while also investing toward the start-up's own continued growth opportunities.

Perhaps most impressively, Hyperconnect is already profitable despite its small size. The only thing better than a smart strategic acquisition is a smart acquisition that can add to the bottom line immediately. With the Tinder operator facing new competition, that's a Match worth making.

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Stocks Mentioned

Twitter, Inc. Stock Quote
Twitter, Inc.
TWTR
$36.79 (-3.99%) $-1.53
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$31,435.58 (-3.73%) $-1,219.01
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$3,916.76 (-4.21%) $-172.09
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
^IXIC
$11,396.87 (-4.90%) $-587.65
Match Group, Inc. Stock Quote
Match Group, Inc.
MTCH

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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