Match Group paid millions in stock awards that could help Tinder co-founder’s $2 billion lawsuit
Match Group, the dating app conglomerate that owns Tinder, Hinge, and more, had to pay Tinder employees $9.4 million in stock compensation this quarter because of the app’s rapid growth. That large number could have implications beyond the company’s finances: it might be consequential in the $2 billion lawsuit the company faces from Tinder co-founder Sean Rad.
Rad claims Match purposely undervalued Tinder in an effort to avoid paying out billions of dollars in stock to the team’s original employees. The bonuses being given out this quarter suggest Tinder’s valuation grew monumentally over the past couple years.
Alex Heath reported in Cheddar that an independent valuation earlier this year valued Tinder at $10 billion, which would trigger performance-based payouts. While Match didn’t announce Tinder’s valuation, the payouts it disclosed this week support Heath’s report.
This new valuation, which comes only two years after Match valued Tinder at $3 billion, could lend Rad’s case some merit. In a comment to The Verge, Rad’s lawyer, Orin Snyder, said today’s news is evidence that “IAC and Match ripped off the Tinder founders and early employees to the tune of billions of dollars.”
Match Group’s spokeswoman Justine Sacco said the company doesn’t “disclose information on internal valuations.”
Match CFO Gary Swidler confirmed that the $9.4 million in stock went to Tinder employees on the company’s earnings call today, and the figure is listed in the company’s earnings release. The announcement follows Heath’s report, which didn’t have the exact payout numbers.
Heath said that, at the time of Tinder’s last valuation, Match gave Tinder employees performance-based stock packages to incentivize them to continue working hard to grow the app.
In the months since Rad’s lawsuit, Match countersued him over claims that he copied internal files and proprietary information before he left the company, violating his employment contract. Match is seeking $230 million, and Rad’s team has filed a motion to dismiss, claiming the contract allowed it.