TINDER SCRAP
Diller wouldn’t swipe his app with Rad gripes
Barry Diller may have swiped right on a deal to acquire Tinder — but he never swiped $2 billion from the dating app’s founders.
That’s what the billionaire media mogul’s conglomerate IAC/InterActiveCorp claimed on Tuesday, denying allegations that it bamboozled ex-Chief Executive Sean Rad and other Tinder founders out of valuable stock options last year.
Rad, who was dismissed as Tinder CEO in late 2016, claimed last month in an explosive lawsuit that IAC swindled him and other Tinder co-founders out of $2 billion by lowballing the app’s value as it calculated the price of their stock options.
“IAC and Match know they cheated Tinder employees out of billions of dollars. Their sham valuation is a case study of corporate dishonesty and corruption. When the jury sees the evidence, we are confident the talented team who built Tinder will prevail,” said Rad’s lawyer Orin Snyder.
But IAC, whose Match Group subsidiary took control of Tinder shortly thereafter, asked a judge on Tuesday to dismiss the suit filed in New York state court, claiming that the 32-year-old Rad was sitting at the table when he negotiated his exit from the company he cofounded in 2012.
“Rad and his advisers participated in the process from start to finish, attending virtually every meeting with the banks over the course of eight weeks, and vigorously advocating for a higher Tinder valuation,” IAC argues, citing bank records noting his presence at the meetings.
After the deal, “Rad and his fellow plaintiffs exercised all of their options, receiving hundreds of millions of dollars as a result,” IAC said.
The controversial ex-CEO, who IAC previously accused of having “a rich history of outlandish public statements” — including telling a British newspaper in 2016 that a supermodel was “beg- ging” him for sex — personally pocketed $400 million from his shares, IAC said.
Following his exit from the CEO job, Rad took a position as chairman of Swipe Ventures, a venture capital firm whose goal was to “expand Tinder’s footprint” through acquisitions and investments.
But Rad, who kept the same office he had as CEO and continued to receive salary and benefits, stopped showing up to work after the valuation process, according to a source close to the situation. He was eventually fired, and Swipe Ventures was shuttered, the source said.
Rad and his fellow plaintiffs, co-founders Justin Mateen and Jonathan Badeen, portrayed themselves in their August suit as sincere creative types who fell victim to IAC sleight-of-hand. But IAC countered Tuesday that Rad is simply a sore loser who cashed out his shares too early.
Despite being “well positioned” to enjoy the rewards of Tinder’s success, Rad instead opted to bet against his creation, cashing out at the earliest opportunity, according to IAC.
IAC noted that Rad’s own projections had Tinder bringing in $503 million in revenue in 2018, while Tinder management projected $454 million.
Now, Tinder is on pace to bring in more than $800 million in revenue this year, according to IAC.
“No one came close to predicting that Tinder was going to be as successful as it has turned out to be,” IAC said.