Update on Our Spark Networks Investment Thesis

This article by MOI Global instructor John Lewis is excerpted from a letter of Osmium Partners, based in Greenbrae, California.

Spark Networks, Inc. provides online personal services in the United States and internationally. The company creates communities that help individuals to form life-long relationships with others who share their interests and values. Its primary properties include JDate.com and ChristianMingle.com, which are communities for the singles of Jewish and Christian faiths. The company was incorporated in 2007 and is headquartered in Berlin and New York. (LOV is a holding across all funds.)

Over the last 24 months, Spark has really been two slow motion IPO’s (Affinitas & Zoosk) that have merged into Spark. We think the “new” Spark (Spark+Affinitas+Zoosk) will gain attention on Wall Street over the next year as the company will grow from $125 million to just under $300 million with guidance of increasing EBITDA from $12 million in 2018 to exceeding $50 million in 2020. The “old” Spark of 24 months ago, will represent less than 14% of total revenue of the new company (Spark+Affinitas+Zoosk).

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Certain factual and statistical (both historical and projected) industry and market data and other information contained herein was obtained by Osmium Partners from independent, third-party sources that it deems to be reliable. However, Osmium Partners has not independently verified any of such data or other information, or the reasonableness of the assumptions upon which such data and other information was based, and there can be no assurance as to the accuracy of such data and other information. Further, many of the statements and assertions contained herein reflect the belief of Osmium Partners, which belief may be based in whole or in part on such data and other information. The analyses provided may include certain statements, assumptions, estimates and projections prepared with respect to, among other things, the historical and anticipated operating performance of the companies. Such statements, assumptions, estimates, and projections reflect various assumptions by Osmium Partners concerning anticipated results that are inherently subject to significant economic, competitive, and other uncertainties and contingencies and have included solely for illustrative purposes. No representations, express or implied, are made as to the accuracy or completeness of such statements, assumptions, estimates or projections or with respect to any materials herein. Actual results may vary materially from the estimates and projected results contained herein. Past Osmium performance is not indicative of future results. Osmium takes concentrated positions. Osmium Partners disclaims any obligation to update this letter. A portion of the Partnership’s assets may from time to time be invested in securities that have limited liquidity. The Partnership’s investment strategy is to make concentrated investments in what it views as its best ideas. The Offering Memorandum and Limited Partnership Agreement offers a comprehensive overview of the risk factors involved in investing with Osmium Partners. The information contained herein is provided for informational purposes only. This is not an offer to sell, or a solicitation to buy, limited partnership interests in Osmium. An investment in Osmium is not suitable for all investors. Graphs/charts are provided for illustrative purposes only and should not be relied on to form an investment decision. Stocks mentioned in the newsletter do not constitute a recommendation to buy or sell the individual securities.