Online Dating Boss Spends £1m On Unloved Shares
The shares of Cupid (LSE: CUP) climbed 3p to 120p during early trading this morning after the company's boss revealed he had invested £1m in his firm.
Bill Dobbie, Cupid's chief executive, said he had acquired 865,000 shares yesterday at 114.11p.
Mr Dobbie added:
"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 1m 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 £81m and underlying earnings before interest, tax, depreciation and amortisation up 45% to £16m.
The group also raised its dividend by 33% to 3p 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 9 times 2012 earnings -- a lowly rating, given the profit growth witnessed last year and the fact that sales since 2009 are up nearly ten-fold.
Cupid made no mention of the allegations within its recent results, although the firm did say it would spend an additional £2m to "develop and enhance the quality of consumer experience".
Mr Dobbie's £1m share trade is likely to have been funded by two earlier sales. He raised £4.6m by selling shares at 110p during 2011 and collected a further £6m during 2012 by selling shares at 180p.
Of course, only you can decide whether Mr 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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