Match Group (NASDAQ: MTCH) shares lost ground last month, shedding 16% even as the S&P 500 rose by 2%, according to S&P Global Market Intelligence. That decline only put a mild dent in longer-term investors’ gains, however, given that the stock still ended September up by more than 70% for 2019 overall.

So what

Most of the decline came late in the month after the Federal Trade Commission announced a lawsuit against the company. Among other things, the FTC alleges the company has been “using fake love interest ads to trick consumers into paying for a Match.com subscription.” In essence, it has allegedly been tempting them with the prospect of exchanging messages with a genuine romantic prospect, when the contacts were coming from accounts already flagged as likely fraudulent.

The FTC doesn’t allege that Match Group was behind the actual romance scams, but rather that it used known scammers’ messages to entice free trial users to sign up for the paid service. Match.com users can’t respond to messages they’ve been sent unless they subscribe.

Now what

It’s unclear how large a financial hit the tech stock would take if it were to lose this lawsuit. The more important question is to what extent Match Group’s subscription growth has been coming from efforts that result in a poor user experience, which would open it to challenges from Facebook (NASDAQ: FB) and others looking to take market share in the online dating business.

The post Why Match Group Stock Lost 16% in September appeared first on The Motley Fool Canada.

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Okta (NASDAQ: OKTA) investors lost ground to the market last month as the stock declined 22% compared to a 2% increase in the S&P 500, according to S&P Global Market Intelligence. The drop removed only a small portion of the tech stock‘s outperformance, though, and shares remain higher by over 80% so far in 2019.

So what

September’s swoon followed strong third-quarter earnings results by the identity-management software specialist that nevertheless disappointed some investors. Okta revealed in late August that sales jumped 49% to again blow past management’s guidance. The company remained in net loss territory but improved its cash burn to $1 million, or 1% of revenue from $5 million, or 6% of revenue last year. Investors may have focused on those losses in choosing to sell the stock last month, and that pressure appears to have been increased by a new debt issuance.

Now what

CEO Todd McKinnon and his team are as bullish as ever about the long-run growth opportunities available as more data moves online and requires better digital identity management. Accordingly, they lifted their 2019 growth outlook for the second straight quarter. Still, investors are likely to see more volatility in this stock, up or down, since it is priced at a premium that reflects plenty of optimism about the business.

The post Why Okta Stock Lost 22% in September appeared first on The Motley Fool Canada.

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Investors in Fitbit (NYSE: FIT) beat the market last month as the stock jumped 23% compared with a 2% increase in the S&P 500, according to S&P Global Market Intelligence. That rally wasn’t strong enough to return the tech specialist to positive territory for the year, though, as shares are down over 20% so far in 2019.

So what

Fitbit’s rally had nothing to do with improving operating trends. In fact, the wearable device maker’s last earnings report, in late July, showed only modest sales growth and net losses as competition continued pouring into the industry. Yet shares spiked on reports that the company is considering a sale to take itself private.

Now what

There are some good reasons a private equity company or larger tech stock might want to buy Fitbit and acquire its large and loyal customer base. But that’s a weak factor to rely on as your sole investing thesis. Investors are better off watching for signs of fundamental operating improvements that would show up in accelerating sales growth or rising profit margin. For now, though, both of these trends point to continued market share losses heading into the crucial holiday shopping period.

The post Why Fitbit Stock Gained 23% in September appeared first on The Motley Fool Canada.

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