Match Group to pay Tinder founders $441 mln to settle lawsuit
Match Group Inc (MTCH.O) said on Wednesday it would pay Tinder founders $441 million to settle a case in which the dating app’s executives claimed the parent company lowballed the app’s value to avoid paying billions of dollars.
The lawsuit filed in 2018 had stated that IAC/InterActiveCorp (IAC.O) and subsidiary Match deliberately prevented Tinder founders Sean Rad, Justin Mateen and Jonathan Badeen from cashing in stock options they could exercise and sell to IAC.
The plaintiffs were given stock options in Tinder as part of their compensation in 2014, but because Tinder is a private company they were not able to exercise their options and then sell stock on the open market.
Instead, they were allowed to exercise their options and sell only to IAC and Match on specific dates, on which the stock options would be independently valued.
However, IAC and Match then merged Tinder into Match, which Tinder’s board of directors was not aware of and did not consent, while canceling the future dates for exercising options, according to the lawsuit filed by the plaintiffs in 2018.
Tinder is one of Match Group’s biggest and fastest-growing brands that has amassed millions of users worldwide and has benefited during the pandemic with many consumers using the app while locked in at home.
Match, which also owns online dating service Hinge, was spun off as a separate public company in 2015.
The company said it intends to pay the settlement from cash on hand.