Tinder founders sue owners over alleged share option deceit
A GROUP of founders and former employees of dating app Tinder are suing the group’s parent company, alleging they were swindled out of $2bn (£1.6bn) worth of share options.
The 55-page legal claim against Match Group and IAC, the owners of Tinder, was filed in New York on Monday.
Among other things, it also accuses Greg Blatt, Match chief executive, who was in control of Tinder at the time, of groping a female employee at a company party in 2016. The lawsuit claims that the misconduct took place in pub- lic but was “whitewashed” because of a 2017 scheme to complete a private valuation of Tinder.
Yesterday, IAC rejected the allegations and said it intends to “vigorously defend against them”.
The lawsuit claims the valuation deliberately undervalued the dating app at the expense of the claimants, led by Tinder co-founders Sean Rad, Justin Mateen, Jonathan Badeen, Alexa Mateen and Joe Munoz.
“Through a pattern of deception, defendants executed this scheme to systematically deprive the Tinder plaintiffs of their rights as option holders,” the claim reads. “Defendants first conducted a disinformation campaign – flooding the private valuation of Tinder in May 2017 with false, misleading and incomplete financial information and projections.”
By creating a false picture of Tinder’s financial condition and prospects, IAC arrived at a $3bn valuation based on “bogus numbers”, the court documents state.
“Then, having undermined their first scheduled valuation of Tinder, defendants moved to extinguish the Tinder plaintiffs’ rights to participate in the company’s future upside.”
The claim states that IAC “merged Tinder out of corporate existence” by combining it with Match without the prior knowledge or consent of either the board of directors or the claimants.
An IAC statement said: “The facts are simple: Match Group and the plaintiffs went through a rigorous, contractually-defined valuation process involving two independent global investment banks, and Mr Rad and his merry band of plaintiffs did not like the outcome … but sour grapes alone do not a lawsuit make.
“Mr Rad has a rich history of outlandish public statements, and this lawsuit contains just another series of them. We look forward to defending our position in court.”