Dating giant Match will pay $441 million to several Tinder co-founders and early employees, who claimed that the company cheated them out of billions of dollars worth of stock options, according to regulatory filings.
Tinder's former CEO and dot.LA investor Sean Rad, former CMO Justin Mateen, and others brought the case against Match, charging that it misled two investment banks to suppress a private valuation of Tinder in 2017. The valuation was used at the time to establish the price of their stock options.
At each side of the court battle stood wealthy executives and investors who had already cashed in on the rise of mobile dating, pitting Rad and the others against billionaire media mogul and IAC chairperson Barry Diller and former Match CEO Greg Blatt.
“Under the terms of the settlement agreement, Match Group will pay plaintiffs $441 million, and plaintiffs will dismiss all claims presently on trial and in arbitration related to the 2017 Tinder valuation,” Match said in a filing. It’s a significant sum for Match, which had $523 million in cash and short-term investments on hand as of Sept. 30.
Tinder launched in 2012 out of Hatch Labs, IAC's now defunct incubator. The holding company — which buys and flips media and tech firms like Vimeo and Expedia — was also wrapped up in the case, but Match took on IAC’s liability when the two split into separate, publicly traded companies last year.
That means Match and its shareholders were stuck with footing the bill for the settlement.
The case kicked off at the start of November. Over the course of a month, Match’s stock price declined roughly 17% to $128.32 per share, while IAC’s stock price slipped more than 15% to 129.30 per share.
"The parties are pleased to announce that they have settled the valuation lawsuit presently on trial in New York Supreme Court and the related valuation arbitration,” the groups said in a joint statement. Spokespeople for the former Tinder executives declined to comment on the deal, and Match did not respond to a request for comment.