Match Group announced Wednesday it will pay $441 million to settle a long-running dispute with the founders of Tinder, marking an abrupt end to a heated courtroom battle over the dating app’s value shortly before being sent to the jury to decide.
The settlement comes a day before Match, its parent company IAC/InterActiveCorp and Tinder founders, including Sean Rad, were set to give closing statements at the end of a nearly month-long trial in New York’s Supreme Court.
Rad, alongside other founders and early executives, accused Match and IAC of intentionally lowballing Tinder’s value to avoid paying out billions in stock options.
The claim is among a number of legal battles and controversies illustrating the tense relationship between former Tinder executives and Match, including allegations of sexual misconduct, defamation and Rad being forced from the company.
They claimed Match and IAC gave banks false information about the dating app’s potential, prompting banks to value Tinder at $3 billion, well below the $13 billion Rad and other plaintiffs believed the company to be worth.
In a filing with the Securities and Exchange Commission, Match said the plaintiffs agreed to drop all claims on trial and in arbitration related to Tinder’s valuation, adding it intends to pay the settlement using cash on hand.
The settlement brings to a close a dispute that has lingered over the companies for three years and closes a trial that has featured testimony from high-profile witnesses at the highest echelons of the companies involved, including IAC Chairman Barry Diller. As much as $2 billion was at stake, the amount the plaintiffs—including founders Rad, Justin Mateen and Jonathan Badeen—alleged Match and IAC cheated them out of with the valuation. Since the suit was filed in 2018, Tinder has exploded in popularity and is one of Match’s most valuable assets, keeping momentum going during the pandemic as many people looked online to meet someone.
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Match shares jumped 2.2% Wednesday morning. They had fallen around 15% over the last month through Tuesday as the trial was underway.
Tinder founders go to court over bitter break-up with Barry Diller (Financial Times)