Cupid said it is to hold a shareholder meeting on December 19 "to apply for shareholder approval for a share buyback programme of up to 10% of the issued share capital of the company".
With a market value around £150 million, this suggests Cupid could spend upwards of £15m on the exercise.
The company revealed last week it expects to end the year with £11m in cash.
Cupid said: "The aim of the programme is to reduce the issued share capital of the company to help enhance returns for shareholders.
"The shares to be purchased on behalf of the company will either be cancelled or held in treasury."
In response its shares rose 7p to 184p, a 4% gain.
Cupid, which operates websites such as Flirt.com and Benaughty.com, had a stellar start to its stock market life after listing on the Alternative Investment Market in June 2010 at 60p per share.
Within 12 months the stock had risen to 250p.
But it has since fallen back significantly, hitting a 52-week low of 165p last month as investors fretted about the sustainability of its business model.
Cupid, which was originally called Easydate, has spent its money on acquisitions, picking up dating websites in countries including France, Germany and Latin America.
It has also been active in the UK, snapping up Uniform Dating for up to £7m in September.
While its share price has faltered, Cupid's operational performance has continued to improve.
It said last month that revenue and profits for the 2012 calendar year were "substantially ahead of last year" when it recorded a 67% jump in annual pre-tax earnings to £7m.