The co-founders of the dating app Tinder, along with eight other current and former executives, filed a lawsuit Tuesday against IAC/InterActiveCorp and its Match Group subsidiary for allegedly bilking them by manipulating financial information to create a lowball estimate of Tinder's value, the AP reports. They are seeking at least $2 billion in the lawsuit against Match and IAC, which is controlled by media mogul Barry Diller. IAC and Match Group, of which Tinder is now part, called the allegations in the lawsuit "meritless." The lawsuit claims that there were written contracts between IAC and Match and Tinder employees, including founders Sean Rad, Justin Mateen, and Jonathan Badeen. The contracts required Tinder be valued on specific dates in 2017, 2018, 2020, and 2021 and that the workers be allowed to exercise their stock options and sell them to IAC and Match.
The lawsuit alleges New York-based IAC and Match instead created false financial information, delayed new products, and used other tactics to try to keep Tinder's valuation low. Per CNN, the dispute centers around a 2017 analysis that valued Tinder at $3 billion, the same valuation that had been set two years prior, despite the fact that both revenue and subscribers had increased in that time; the suit says the 2017 valuation, which was done to set a value for stock options received by Rad and other early employees, should have been higher. Tinder was then merged into Match Group, which the lawsuit says was a pretext to extinguish Tinder employees' stock options. "They lied about the financial performance. They manipulated financial data, and essentially stole billions of dollars by not paying us what they contractually owe us," Rad tells CNN. In a statement, IAC and Match Group said Rad, Mateen, and other former execs "may not like the fact that Tinder has experienced enormous success following their respective departures, but sour grapes alone do not a lawsuit make." See CNN for much more on the ins and outs of the suit, which also includes allegations of sexual harassment and groping against Tinder's former CEO. (Read more Tinder stories.)