Tinder’s owner, Match Group, will pay $441 million to the founders of the online matchmaking app.
Tinder was valued at $3 billion when it was sold to Match Group and IAC in 2017. But Tinder’s former owners say this is misinformation; He filed a lawsuit in 2018 claiming the company was actually worth $13 billion at the time.
The lawsuit, filed in New York Supreme Court and pending since mid-November, claims that Match Group and IAC undervalued Tinder, thus avoiding billions of dollars in payments.
Shares of Match Group, which also owns other apps like Match.com, OKCupid, Hinge, Meetic, and PlentyOfFish, today valued at $36.6 billion, fell two percent.
Tinder’s co-founders, including Sean Rad, Justin Mateen, and Jonathan Badeen, were awarded stock options in the company in 2014 as compensation.
However, because Tinder is a private company, its stocks could not be converted into cash and sold on the free market.
Plaintiffs allege that they were only able to sell shares of the company, which amounts to one-fifth of Tinder’s total value, to Match and IAC on predetermined dates, when the stock options were independently valued.
Plaintiffs also argued that Tinder and Match.com were merged without consulting the board.
Match and IAC paid the plaintiffs $600 million at the time, but the plaintiffs are seeking at least $2 billion in damages. Attorney for Match and IAC companies said Sean Rad had “regrets of the sale” and did not say the company was valued at over $3 billion in 2017.
It has been announced that Match Group will make the payment in cash.