The trial for the Tinder founders vs Match Group and IAC lawsuit went to trial on 8th November, with the plaintiffs claiming that the dating app was deliberately undervalued when they cashed in their stock options in 2017.
Joshua Dubin, an attorney acting on behalf of Sean Rad and his team of early employees, told the jury that the founders were owed 20% of Tinder’s valuation when cashing in their stock options. They believe it was worth $13.2 billion, but are alleging that Match Group and IAC executives deliberately deceived banks into coming to a $3 billion valuation.
Two weeks before the trial started, leaked emails from former CEO Greg Blatt appeared to value Tinder at $12 billion. The defendants say this was a hypothetical figure based on potential future growth and targets that were ultimately not met.
On the first day of the trial, Match Group’s attorneys made several attempts to call a mistrial over claims that Dubin went “too far” in his opening remarks. Each bid was turned down by Supreme Court Justice Joel Cohen.
The defence then had the opportunity to retaliate the following day. They stated that the valuation for Tinder was determined by major investment banks, Barclays and Deutsche Bank, after receiving information from both Match Group and Rad.
However, Rad is suggesting that his team was prevented from submitting their own analysis to help with the valuation.
He spent the whole of Wednesday, 10th November on the stand where he described a meeting with Blatt in early 2017 which valued Tinder at $1.8 billion. Rad then brought in an independent analyst to better understand the numbers, with whom Blatt allegedly refused to cooperate.
IAC Chairman Barry Diller denies all allegations of using threats to get his way. He also explained that if Tinder was worth $13.2 billion then the company would have never publicly sold Match Group shares.
Justice Cohen has reminded both sides on several occasions to not turn the trial into a “mudslinging affair” or a “popularity contest”.
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