Will Facebook Pull the Trigger on a Netflix-like Acquisition?

Once upon a time, Netflix (NASDAQ:NFLX) traded near $50 a share and had bad press on all sides. It had tens of millions of subscribers to its service, yet no giant company pulled the trigger on an acquisition. Since that day (actually, the end of September 2012), the price has soared above $217 and is out of reach for most companies that could have considered it earlier. Discounting the 20/20 hindsight premise, is Facebook (NASDAQ:FB) staring at a potential buy that could deliver Netflix-like results?

Kase Capital’s Whitney Tilson thinks there’s a similar deal out there, one which Facebook or a company like IAC (NASDAQ:IACI) might want to swallow up sooner rather than later. Tilson told Louis Bedigian of Bezinga that he considers Spark Networks (AMEX:LOV), owner of JDate and Christian Mingle, one that could be the target of more than a few suitors.

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How does the comparison hold water? Tilson notes the methods of Spark are similar to those of Netflix, i.e. taking considerable profits and pumping them straight back into their businesses, setting the company up for big-time growth in the future. To skeptics who say that JDate has already hit its saturation point, Tilson argues that Christian Mingles — and its much larger audience — has yet to hit its stride…

Tilson spoke at the Value Investing Congress on Tuesday and mentioned his Spark pick, which he sees pregnant with potential because of Christian Mingle, rather than the JDate moneymaker. Christian Mingle, he noted, has 30 times the potential market of JDate, which could attract a company like IAC (which owns Match.com) or Facebook when considering Spark. Facebook is already selling its highly valuable information to Spark in order for the matchmaking sites to hit their targets more accurately.

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With Spark trading under $8 as of this writing, Tilson sees a ridiculous upside for the company, something anyone with the cash at hand would consider when making an acquisition. In fact, for a company like IAC or Facebook, he likened the purchase of Spark to a “bite-sized acquisition.” Countless media companies are kicking themselves for not going after Netflix. Will the social media and search giants be saying the same about Spark?

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