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After Long Battle, The Tinder-Match Lawsuit is Over

Match breaks up with Tinder (logos)
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Match Group announced December 1 that it will pay $441 million to the founders of Tinder to settle a dispute over the dating app’s 2017 market valuation. This decision marked an abrupt end to a heated courtroom battle just one day before scheduled closing statements would send the suit to a jury to decide.

Tinder founders and executives accused Match and its parent company, IAC/InterActiveCorp, of intentionally undercutting Tinder’s value to avoid paying out billions in stock options. Plaintiffs claimed Match and IAC gave banks false information about the dating app’s potential, which led to a $3 billion valuation — well below the $13 billion Tinder co-founder Sean Rad and other claimants asserted Tinder to be worth. This low-ball valuation bilked Tinder founders and employees out of billions of dollars in collective equity compensation.

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Tinder attorneys asserted that Match executives frequently boasted that Tinder was a “rocket ship” with an incredible growth outlook while, at the same time, issuing “doom and gloom” forecasts to the banks calculating the company’s valuation. In response, Match and IAC jointly responded that this was just “sour grapes” arising from early employees who were bitter that they cashed out too soon.

Money wasn’t the only controversy ratcheting up the tense relationship between the former partners. The trial followed several explosive assertions. Former Tinder plaintiffs leveled allegations of Rad’s forced exit from the company and accusations that billionaire media mogul Barry Diller, an IAC owner, buried 2016 sexual misconduct allegations against Match Group CEO Greg Blatt so that Blatt could continue to manipulate valuation numbers.

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IAC may have decided it had had enough when one of the final trial testimonies was a recorded deposition of Jefferies banker Storm Duncan detailing how, when requesting supplemental information in Tinder’s valuation process, Blatt allegedly responded, “With all due respect, you can go fuck yourself.” (A claim Blatt continues to deny.)

According to a Match Group filing with the Securities and Exchange Commission, the settlement will sew up both Rad’s New York State Supreme Court suit and several other claims in arbitration over 2017’s contested valuation. Match — also the owner of Hinge, OkCupid, and PlentyOfFish — stated that money for the settlement will come out of the company’s cash on hand, which stood at $523 million at the end of the third quarter.

Despite Match Group and Tinder’s radically different views on what failed the relationship, analysts agreed that a settlement was a smart option for both parties.

Morning Brew noted that an analyst from Truist Securities painted the situation as a net positive for Match Group since the “litigation overhang” is “now in the rearview mirror.” Truist estimated that Match spent tens of millions of dollars since the lawsuit’s August 2018 filing.

Match Group shares, which had fallen 13% over the past month, were trending up after this week’s settlement.

Read More: ‘Cowboy Bebop’ Be Gone — Netflix Pulls the Plug After Less Than a Month

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