By Akash Sriram

(Reuters) -Match Group on Tuesday forecast second-quarter revenue below analysts’ expectations, but said it is seeing signs of growth at Tinder after it made changes at the dating platform.

Tinder has undergone changes to product and marketing execution and though those optimizations are not visible yet in the financial results, it is seeing early signs of greater momentum, Match Group said in a letter to shareholders.

Shares of the company, whose revenue per paying user grew by about 2% from a year earlier, rose 3% in volatile trading after the bell.

Match, which also announced a $1 billion share buyback program, said paying users and direct revenue for its flagship app Tinder were little changed in the first quarter from a year ago, the company said.

“Online dating, though resilient in recent history, is beginning to feel the pressure of tightening wallets and ARPU (average revenue per user) can be expected to decline industry-wide throughout the rest of 2023,” said Nicholas Cauley, an analyst at Third Bridge.

The company forecast current-quarter revenue between $805 million and $815 million, compared with analysts’ average estimate of $822.3 million, according to Refinitiv.

Dating app Hinge introduced a two-tier subscription model, giving users more options, which is expected to increase the average revenue per user and bring in more paying users.

The company said negative foreign exchange impact in the reported quarter was $35 million, $7 million more than it had anticipated in its fourth-quarter earnings call.

Match Group said it saw paying users across its family of dating apps fall 3% from a year earlier to 15.9 million.

The company reported revenue of $787 million in the three-month period ended March 31, compared with analysts’ average estimate of $793.8 million.

Net profit fell to $120.8 million, from $180.5 million, a year earlier.

(Reporting by Akash Sriram in Bengaluru; Editing by Shailesh Kuber)

By Sinéad Carew

NEW YORK (Reuters) – Wall Street stock indexes closed lower on Tuesday, a day ahead of the Federal Reserve’s interest rate decision, while U.S. Treasury yields fell as investors worried the government could run out of cash after June 1 without a debt ceiling hike.

Bank stocks underperformed sharply after the weekend failure of U.S. regional bank First Republic Bank.

Energy shares tumbled as oil prices fell 5% to a five-week low on concerns about the economy as U.S. politicians argued about how to avoid a debt default and investors prepare for another interest rate hike this week.

The dollar index dipped after disappointing U.S. data a day before that the Fed is expected to hike rates by an additional 25 basis points and give guidance on whether it plans to raise rates further in June.

Top U.S. Senate Republicans on Tuesday called on President Joe Biden to accept their party’s debt-ceiling package or make a counter-offer, while a top Democrat said the Senate might try to advance a “clean” debt-ceiling hike next week. Late on Monday, the Treasury Department had said the U.S. could run out of the cash needed to pay its bills in the next month.

Meanwhile regional U.S. banks posted massive declines, dragging the S&P 500 bank index down 3.2% after the failure over the weekend of First Republic and the agreed sale of its assets to JPMorgan Chase.

Trading on Tuesday reflected growing investor worries that more banks would start to show steep deposit outflows like First Republic, the third major U.S. bank to collapse since March, said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

“Couple that with the Fed’s rate decision tomorrow and you’ve elevated levels of anxiety in financials spilling over the market in general … the debt ceiling limit is part of an elevated anxiety,” James said.

The Dow Jones Industrial Average fell 367.17 points, or 1.08%, to 33,684.53, the S&P 500 lost 48.29 points, or 1.16%, to 4,119.58 and the Nasdaq Composite dropped 132.09 points, or 1.08%, to 12,080.51.

MSCI’s gauge of stocks across the globe shed 0.96%. Emerging market stocks lost 0.26%.

Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut, said “investors are recognizing that there’s challenges in the near term,” citing headwinds including the Fed meeting, the looming debt ceiling and bank concerns as well as weak economic data.

Data showed U.S. job openings fell for a third straight month in March even as they remained at levels consistent with a tight labor market.

(Graphic: Debt ceiling crisis and U.S. stocks – https://www.reuters.com/graphics/USA-STOCKS/byprleoqdpe/chart_eikon.jpg)

In currencies, the dollar index, which measures the greenback against a basket of major currencies, fell 0.245%, with the euro up 0.25% to $1.1002.

The Japanese yen strengthened 0.73% versus the greenback at 136.50 per dollar, while sterling was last trading at $1.2471, down 0.20% on the day.

U.S. Treasury investors strengthened bets that the Federal Reserve will reverse its interest rate-hiking course sooner than expected, amid a wide sell-off in regional bank stocks and signs that government funds will run short by June.

The benchmark 10-year Treasury note yields were down 14.4 basis points to 3.430%, from 3.574% late on Monday. And the 30-year bond was last down 10.7 basis points to yield 3.7101% while the 2-year note was last was down 15.3 basis points to yield 3.986%, from 4.139%.

U.S. crude oil futures settled down $4 or 5.29% at $71.66 per barrel and Brent finished at $75.32, down $3.99 or 5.03% on the day.

Gold extended gains, on track for its biggest daily gain in a month, as yields dropped on renewed fears of contagion in the U.S. banking sector and ahead of the Fed’s rate decision.

Spot gold added 1.8% to $2,016.79 an ounce. U.S. gold futures gained 1.64% to $2,015.90 an ounce.

(Additional reporting by Amanda Cooper in London, Tom Westbrook in Singapore; Editing by Mark Potter, David Gregorio and Josie Kao)

By Helen Coster and Kenneth Li

NEW YORK (Reuters) -Thomson Reuters Corp on Tuesday reported higher-than-expected sales and operating profit in the first quarter, helped by divestitures and high customer retention rates, as it plans a deeper investment in artificial intelligence.

The news and information company reported adjusted earnings of 82 cents per share, beating analyst forecasts for 80 cents.

Total revenue rose 4% in the quarter to $1.738 billion, beating expectations, according to estimates from Refinitiv.

Thomson Reuters, which owns the Westlaw legal database, Reuters news agency and the Checkpoint tax and accounting service, said organic revenue was up 7% for its “Big 3” segments: Legal Professionals, Corporates and Tax & Accounting Professionals.

“While we acknowledge elevated macroeconomic uncertainty, our underlying business is resilient,” Chief Executive Steve Hasker said in a statement.

Thomson Reuters reaffirmed most 2023 financial estimates, but trimmed its full-year total revenue growth forecast to 3% to 3.5%, from 4.5% to 5%, reflecting the sale of a majority stake in legal business management software company Elite to TPG. 

In an interview with Reuters, Hasker said the company does not expect layoffs this year.

Shares, which reached a record high last month, fell about 1% in both New York and Toronto trading.

The company “delivered a good quarter” but its positives are already reflected in its shares, analyst Matt Arnold of Edward Jones said in a note, adding he saw no catalyst for Tuesday’s stock decline.

Thomson Reuters plans to spend some $100 million a year to invest in artificial intelligence, Hasker said. It will start seeing generative AI incorporated into flagship products in the second half of this year. Generative AI is a type of artificial intelligence that generates new content or data in response to a prompt, or question, by a user.

The $100 million is separate from the company’s M&A budget, which will be about $10 billion from now to 2025, Michael Eastwood, Thomson Reuters’ Chief Financial Officer, said in an interview.

Over the last three years, almost all of the company’s M&A budget has been allocated to artificial intelligence, and executives see that trend continuing. AI features will be incorporated in most major business divisions — legal, tax and accounting, and in the news business.

AI is already embedded in Thomson Reuters products such as Westlaw Edge and Practical Law. In 2022, the company acquired PLX AI, a real-time financial news service powered by the technology.

The company said it sold 24.5 million shares of London Stock Exchange Group (LSEG) in the first quarter for gross proceeds of $2.3 billion. As of April 30, it owned 47.4 million shares of LSEG, worth $5 billion.

Thomson Reuters said it had “increasing confidence” about its outlook but noted there were “many signs that point to a weakening global economic environment” from high interest rates and geopolitical risk.

In April, the company said it would return $2.2 billion to shareholders through a cash distribution and a reverse stock split after selling some of its LSEG shares.

(Reporting by Helen Coster and Kenneth Li in New York, Editing by Nick Zieminski)

By Dietrich Knauth

(Reuters) -Revlon Inc said on Tuesday that it has emerged from bankruptcy after cutting more than $2.7 billion in debt and handing control of the beauty products company to its lenders.

CEO Debra Perelman said in a statement that Revlon is stronger after bankruptcy and well positioned for long-term growth.

“We look forward to unlocking the full potential of our globally recognized brands and continuing to offer our customers the iconic products they have loved for decades,” Perelman said.

Revlon, which has a 91-year history selling lipstick, nail polish and other beauty products, filed for bankruptcy in June, saying its $3.5 billion debt load and pandemic-related disruptions had left it too cash-poor to make timely payments to critical vendors in its cosmetics supply chain.

Revlon has filled its post-bankruptcy board of directors with experienced executives from the consumer, retail, and beauty industries, including former Bloomin’ Brands CEO Elizabeth Smith and former Sephora CEO Martin Brok.

Revlon’s lenders took ownership of the company in exchange for the debt reduction agreement, wiping out the equity value of existing shareholders.

The company’s largest shareholder was MacAndrews & Forbes, which is owned by Perelman’s father Ron Perelman. MacAndrew & Forbes held 85% of the company’s shares at the time of its bankruptcy filing, and the remaining stock saw a surge in interest from retail investors last year before collapsing in value.

Revlon’s new owners include Glendon Capital Management, King Street Capital Management, Angelo Gordon & Co, and Oak Hill Advisors.

King Street Capital Managing Director Noah Charney said the new owners were proud to “serve as stewards” of a “storied American business.”

The company, which has changed its corporate name to Revlon Group Holdings, said it exited from bankruptcy with $1.5 billion in debt and $236 million in available liquidity. It previously announced plans to raise $670 million by selling new equity shares after its bankruptcy. 

Revlon reported $490 million in net sales for the first quarter, up year on year from $479.6 million.

(Reporting by Dietrich Knauth in New York and Nandhini Srinivasan in BengaluruEditing by Marguerita Choy)

By Hardik Vyas and Sheila Dang

(Reuters) – Twitter’s attempt to implement a paid account verification service has attracted imposters spreading misinformation, which experts said could lead major brands to further pull back from the social media platform owned by billionaire Elon Musk.

On April 20, Twitter moved to boost profits by removing the once-coveted blue check marks from accounts and charging $8 a month to users who wish to buy a Twitter Blue subscription to retain their verified status.

Musk’s latest initiative was met with a wave of imposter accounts sharing harmful misinformation. Some organizations have already stopped using Twitter, including the New York City Metropolitan Transportation Authority (MTA) with 1.3 million followers. Both AT&T Inc and Volkswagen AG told Reuters they had paused Twitter ads and had not yet resumed as of April.

Twitter has been hit by a massive decline in advertising since the acquisition but Musk told the BBC last month most of the advertisers are returning to the platform.

Data from outside research firms and statements from several advertisers show Twitter’s ad business may not be bouncing back that quickly.

“Twitter Blue is a mess. This is more chaos and confusion for brands who were already wary of impersonation. They don’t want to remain on a platform where they feel vulnerable,” said Jasmine Enberg, principal analyst at Insider Intelligence.

Since Musk bought Twitter in October and began making rapid changes, brands have been debating whether they should keep advertising on the platform. Enberg said Twitter’s removal of legacy checkmarks could prompt some companies to stop tweeting and maintaining their profile.

“There’s little incentive for brands to keep an organic presence when they think their brand is at risk, and especially on a platform where it’s not going to drive any meaningful impact,” she said.

Rachel Moran-Prestridge, a postdoctoral scholar at the University of Washington’s Center for an Informed Public, said Twitter’s checkmarks for years gave users confidence an account was legitimate.

“Without this verification, users have to do much more heavy lifting to try to ascertain whether the account is who they say they are,” she told Reuters in an email.

In a move that furthered confusion, Twitter on April 22 appeared to give some high-profile users a verification mark.

Within the next 48 hours, all but 110 of the most-followed Twitter accounts suddenly had verification through Twitter Blue, indicating Twitter likely gifted the check marks, independent researcher Travis Brown told Reuters.

Neither Twitter nor Musk has commented on the return of the verification marks for a select few users.

An emailed request for comment to Twitter returned an automated reply with a poop emoji.

Reuters is a partner of Twitter’s Community Notes fact-checking project. 

A fake account posing as Disney Junior UK, now a defunct TV channel, last week was issued a gold checkmark used for “verified organizations”. The Walt Disney Co told Reuters it contacted Twitter and the account was suspended.

New York’s MTA said last Thursday it “does not pay tech platforms” and would stop tweeting service alerts and information.

“The reliability of (Twitter) can no longer be guaranteed,” the MTA said in a statement.

GRADUAL PULLBACK

Since the initial rollout of the Twitter Blue service in November, imposter tweets have spread harmful misinformation.

U.S. drugmaker Eli Lilly and Co watched its stock tumble over 4% and was forced to apologize after a Twitter user impersonating its official account posted “insulin is free.”

Imposter Twitter accounts also tarnished the online reputations of Lockheed Martin Corp and Nintendo Co Ltd. Last month, Twitter told advertisers in an email that businesses spending less than $1,000 per month on Twitter ads must be subscribed to Twitter Blue or pay to be part of the verified organizations program to keep running ads on the platform, according to Matt Navarra, a social media consultant who has worked with Meta and Mozilla.

Eric Yaverbaum, CEO of the New York-based PR agency Ericho Communications, said more brands are likely to pull away if Twitter does not implement a stringent user verification model.

“Brands have already stopped ads on Twitter, many won’t come back, and I have a feeling more companies will put an end to advertising on the platform,” Yaverbaum said in an e-mail to Reuters.

Some brands have already taken countermeasures against online impersonation by retaining the services of brand reputation management companies.

Social Impostor CEO Kevin Long said a number of factors attract online impersonators to a celebrity or brand.

“Just because you had – or will have – a blue verification mark does not deter the imposters from creating accounts,” Long, whose company took down over 8,000 bogus accounts across major platforms, told Reuters in an email.

“The volume of imposter accounts seems to depend on several things — Is the client doing a high profile event that week? Is the client in the news for some reason – good or bad? My experience is this is across all social platforms.”

(Reporting by Hardik Vyas in Bengaluru and Sheila Dang in Dallas; Editing by David Gregorio)

By Gertrude Chavez-Dreyfuss and John McCrank

NEW YORK (Reuters) – A decade after a manipulation scandal turned global regulators and investors against the London Interbank Offered Rate (LIBOR) as the global interest rate benchmark, major clearing houses are in the final weeks of the nearly $50 trillion transition of the U.S. rate swaps market to its successor.

The U.S. interest rate swaps market, with daily turnover of about $1 trillion, is in the last phase of its conversion into the risk-free rate called the Secured Overnight Financing Rate (SOFR), from dollar LIBOR, which is set to expire at the end of June.

Interest rate swaps, a measure of the cost of exchanging fixed rate cash flows for floating rate ones over a specific period, give businesses a way to manage interest rate risk and are used by investors to express views on where borrowing costs will go.

Since its introduction in 1986, LIBOR grew to become the dominant reference rate on loans and derivatives. Regulators, however, mandated LIBOR’s termination after fining the banks that set the rate billions of dollars for rigging it.

In contrast, SOFR is a broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities in the repurchase (repo) market.

The two main derivatives clearing houses, the CME Group and LCH, have started converting cleared U.S. dollar LIBOR swaps into cleared SOFR swaps this year. LCH will finish this month and the CME by July.

CME’s and LCH’s conversion followed successful transitions of Swiss franc, euro, sterling and yen LIBOR-listed derivatives in 2021.

LCH, which clears more than 90% of global rate swaps, converted the first part over April 22 to 23, with an aggregate notional value of $1.5 trillion worth of contracts. The total value of contracts for conversion by LCH is $45 trillion.

“What we did was a contractual conversion of a portion of LCH’s U.S. dollar LIBOR-linked cleared swaps,” said Phil Whitehurst, head of service development and rates at LCH.

“We made an explicit change to those contracts, about 50,000 of them. We explicitly changed the floating rate benchmark on those contracts from U.S. dollar Libor to U.S. dollar SOFR.”

LCH’s second conversion will take place on May 19.

The CME, meanwhile, converted some LIBOR swaps on March 24, as well as 7.5 million contracts in Eurodollar open interest and $4 trillion in cleared U.S. LIBOR swaps to corresponding SOFR derivatives in April.

It will then convert zero-coupon swaps on July 3 along with any U.S. LIBOR swaps cleared after the primary conversion.

“The conversion of Eurodollar futures, options, and USD LIBOR cleared swaps was successfully completed according to fallback procedures incorporated into the products’ respective Rulebooks, and after extensive consultation across market participants,” said Agha Mirza, CME’s global head of rates and over-the-counter products.

Eurodollar futures, which tracked short-term funding rate expectations over several years, was one of the most heavily-traded assets in the world. Investors hedged interest rate risk in this market.

Eurodollar futures last traded on April 14, with the CME converting those contracts into SOFR units. The April, May and June 2023 eurodollar futures and options will still be available to trade until their contract’s expiration.

“The conversion was well-telegraphed, but is still meaningful given the importance of eurodollars in curve construction and interest rate risk hedging,” wrote TD Securities analysts in a research note.

“Trading activity has mostly transitioned across to SOFR. So 94%-95% of risk changing hands in swaps these days are being pegged to SOFR as a benchmark already,” said LCH’s Whitehurst.

SOFR swaps have consistently accounted for more than 85% of daily volumes on average of interest rate risk traded in the outright swaps market since June 2022.

LIBOR swaps, on the other hand, have accounted for less than about 10% of the overall volume, according to a report from the Alternative Reference Rates Committee (ARRC), a group of private-market participants convened to help with the transition from USD LIBOR to SOFR.

(Reporting by Gertrude Chavez-Dreyfuss and John McCrank; Editing by Alden Bentley and Josie Kao)