Match settles a legal battle with Tinder founders for $ 441 million
US online dating giant Match Group has agreed to pay Tinder founders $ 441 million (£ 331.4 million) to settle a legal battle over the dating app’s value.
The founders of Tinder sued Match and its former owner IAC in August 2018, claiming they underestimated the app to avoid paying billions of dollars.
When Match and media giant IAC bought the founders in 2017, the company was valued at $ 3 billion.
But the founders of Tinder claim it was really worth $ 13 billion at the time.
The case has been on trial since mid-November in the New York Supreme Court.
Shares of Match Group fell 2% on the news to $ 127.93.
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Match Group, which also owns Match.com, OKCupid, Hinge, Meetic, PlentyOfFish, Ship and OurTime, is now worth $ 36.6 billion.
The plaintiffs, made up of 10 current and former top employees including Sean Rad, Justin Mateen and Jonathan Badeen, received stock options in Tinder as part of their compensation in 2014.
But because Tinder is a privately held company, they weren’t allowed to cash in on their stock options and sell stock on the open market.
Their full share, equivalent to one-fifth of Tinder, could only be sold to Match and IAC on specific dates, when stock options would be independently priced.
The lawsuit alleges that when Tinder was sold to Match and IAC, the companies merged Tinder into Match without the consent of Tinder’s board of directors and canceled future dates for exercising the options.
Match and the IAC paid plaintiffs $ 600 million at the time, equivalent to Tinder’s worth of $ 3 billion.
Plaintiffs said they were forced to accept the $ 3 billion valuation and ask for at least $ 2 billion in damages.
However, attorneys at Match and IAC argued that Mr. Rad suffered from “seller’s remorse” and didn’t take the opportunity to argue that Tinder was worth more than $ 3 billion when it was valued in 2017.
Matching group archiving Wednesday with the US Securities and Exchange Commission (SEC) said the company intends to pay for the deal using available cash.
- Dating app
- Online dating
Tinder founders are suing dating app owners
- 14th August 2018
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- May 21
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