Co-founders of Tinder and eight other former and current executives of the popular dating app are suing the service's current owners, alleging that they manipulated the valuation of the company to deny them of billions of dollars they were owed.
The suit, filed Tuesday in state court in New York, seeks at least $2 billion in damages from Match Group (MTCH) and its parent company, IAC/InterActiveCorp (IAC). The plaintiffs are represented by Orin Snyder of Gibson Dunn, who has represented some of the biggest companies in tech, including Facebook, Apple and Uber.
Four of the plaintiffs, who still work at Tinder, were put on paid administrative leave by the company on Tuesday, according to a source familiar with the matter. The dispute centers on an analysis of Tinder done in 2017 by Wall Street banks to set a value for stock options received by Sean Rad, a Tinder co-founder,
and other early employees. It also includes an allegation of sexual harassment against Tinder's former CEO, Greg Blatt. IAC issued a statement calling the suit "meritless" and saying it would "vigorously defend" itself against it.The statement said that Rad and other former executives who left the company a year or more ago "may not like the fact that Tinder has experienced enormous success following their
respective departures, but sour grapes alone do not a lawsuit make."
Tinder's 2017 valuation was set at $3 billion, unchanged from a valuation that had been done two years earlier, despite rapid growth in revenue and subscribers. The suit charges that
executives with Match and IAC deliberately manipulated the data given to the banks, overestimating expenses and underestimating potential revenue growth, in order to keep the
2017 valuation artificially low. That manipulation allegedly deprived some early Tinder employees of millions, or billions, of dollars.
"They lied about the financial performance. They manipulated financial data, and essentially
stole billions of dollars by not paying us what they contractually owe us," Rad said in an
interview with CNN. "We're here to preserve our rights and to fight for what's right."
FACEBOOK COMMENTS
