American online dating giant Match Group has agreed to pay Tinder’s founders $ 441 million (£ 331.4 million) to settle a legal battle over the value of the dating app.
Tinder’s founders first sued Match and its former owner IAC in August 2018, claiming they had undervalued the app to avoid paying billions of dollars.
When Match and media giant IAC bought the founders in 2017, the company was valued at $ 3 billion.
But the founders of Tinder claim that it was actually worth $ 13 billion at the time.
The case has been on trial since mid-November in the New York Supreme Court.
Shares of Match Group fell 2% on the news to $ 127.93.
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Match Group, which also owns Match.com, OKCupid, Hinge, Meetic, PlentyOfFish, Ship, and OurTime, is worth $ 36.6 billion today.
The plaintiffs, consisting of 10 current and former senior officials, including Sean Rad, Justin Mateen and Jonathan Badeen, received stock options on Tinder as part of their compensation in 2014.
But because Tinder is a private company, they were not allowed to cash in their stock options and sell stocks on the open market.
Your entire stake, equal to one-fifth of Tinder, could only be sold to Match and IAC on specific dates, when the stock options would be separated.
The lawsuit claims that when Tinder was sold to Match and IAC, the firms merged Tinder into Match without the consent of Tinder’s board of directors and canceled future dates for when the options could be exercised.
Match and IAC paid the plaintiffs $ 600 million at the time, which equates to a Tinder value of $ 3 billion.
The plaintiffs said they had been forced to accept the $ 3 billion valuation and were seeking at least $ 2 billion in damages.
However, lawyers for Match and IAC argued that Rad suffered from “seller’s remorse” and had not taken the opportunity to argue that Tinder was worth more than $ 3 billion when it was valued in 2017.
Match Group’s filing with the U.S. Securities and Exchange Commission (SEC) on Wednesday indicated that the company intends to pay for the deal in cash.