Legal dispute with founders of Tinder settled for $441 million


US online giant Match Group has agreed to pay Tinder founders $441m (£331.4m) to settle a legal battle over the dating app's value.


The Tinder founder 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 it was actually worth $13 billion at the time.


The case has been under trial since mid-November in the New York Supreme Court.


Match Group shares fell 2% on the news, to $127.93.



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The Match Group, which also owns Match.com, OKCupid, Hinge, Meetic, PlentyOfFish, Ship and OurTime, is worth $36.6 billion today.


The plaintiffs, made up of 10 current and former senior employees, including Sean Rad, Justin Mattin and Jonathan Baden, were granted Tinder stock options as part of their compensation in 2014.


But since Tinder is a private company, they were not allowed to take advantage of their stock options and sell shares on the open market.


Their total shares, equal to one-fifth of Tinder, can only be sold to Match and the IAC on specified dates, when the stock options are independently valued.


The lawsuit alleges that when Tinder was sold to Match and the IAC, the companies incorporated Tinder into Match without the approval of Tinder's board of directors and voiding future dates when the options could be exercised.


Match and IAC paid the plaintiffs $600 million at the time, the equivalent of $3 billion on Tinder.


The plaintiffs said they were forced to accept the $3 billion valuation and were seeking at least $2 billion in compensation.


However, Match and IAC lawyers argued that Mr. Rudd was suffering from "seller's remorse" and did not take the opportunity to say that Tinder was worth more than $3 billion when it was valued in 2017.


Match Group announced with the US Securities and Exchange Commission (SEC) on Wednesday that the company intends to pay the settlement using cash on hand.

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