Tinder’s co-founders and several senior executives filed a lawsuit for $2 billion, claiming that Tinder’s owner, IAC and Match Group, robbed employees by lowering Tinder’s valuation and taking away their stock options. The 10 plaintiffs include co-founders Sean Rad, Justin Mateen, and Jonathan Badeen, three current executives, as well as former executives and directors.
According to the suit, there were written contracts between IAC and employees for Tinder to be valued on certain dates in 2017, 2018, 2020, and 2021 in which they would be able to exercise stock options. However, IAC merged Tinder into Match Group in 2017, thus alleging to have intentionally undervalued Tinder. When Tinder stock options were converted into Match stock, employees received fewer and less valuable options.
The lawsuit alleges that IAC tried to lower the company’s valuation by creating false financial information, lying about Tinder’s continued rapid growth, and delaying the launch of important features that drive the platform’s revenue.
Tinder is one of Match Group’s biggest and most profitable brands, especially with features like Tinder Gold and other in-app purchases that help boost revenue, making Tinder the top-grossing iOS app as of September 2017. However, the lawsuit alleges that despite the boost in revenue, IAC continued to value Tinder at $3 billion; the same valuation it gave the platform two years before the merger. IAC also allegedly bullied and lied to Tinder employees, threatening to fire them if they revealed Tinder’s true worth.
Additionally, the suit alleges that Blatt, the former IAC chairman and CEO who took over as interim CEO of Tinder, groped and sexually harassed Rosette Pambakian, Tinder’s VP of marketing and communications, back in 2016. However, IAC did not fire Blatt as it needed him to complete the merger.
In response to the lawsuit, IAC released a statement saying “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…We look forward to defending our position in court.”
By: Maytinee Kramer
