Spaceship added InterActiveCorp (IAC) to the Spaceship Universe Portfolio last quarter.
Which has worked out rather well, because these guys indirectly own Tinder!
Well, actually IAC has an 81% stake in Match Group, which undertook an initial public offering in 2015. And Match Group owns Tinder, OKCupid and PlentyOfFish.
Match Group is just one of IAC’s business segments. IAC (which is a New York-based company) also owns businesses like Vimeo, Investopedia, The Balance, The Daily Beast, HomeAdvisor and Angie’s List...a rather diverse and juicy suite of businesses.
Now back to Tinder. It has had a phenomenal year. Tinder now has an average 3.8 million users. Overall, the number of Match Group dating subscribers reached 7.7 million and this month’s results showed Tinder had signed up nearly 300,000 paying users in the three months ending June 30. This was more than analysts expected.
Match Group shares have more than doubled in the past 12 months, according to Bloomberg data, and Match Group now expects full-year revenue of between $1.68 billion and $1.72 billion.
But there’s a lawsuit going on at the moment which calls into question the valuation of Match Group, and the valuation of Tinder by the Match Group.
Tinder’s co-founders and several current senior executives are suing the platform’s parent company (Match Group) and ultimate holding company (IAC) for $2 billion in damages.
According to the suit, there were written contracts between IAC and the employees for Tinder to be valued on dates in 2017, 2018, 2020, and 2021 when they would be given the chance to exercise stock options. But instead, IAC merged Tinder into Match Group in 2017, and by doing so, the Tinder co-founders have alleged that IAC and Match Group intentionally undervalued Tinder. It's further alleged that when Tinder stock options were converted into Match stock, the employees received fewer and less valuable options.
The co-founders have alleged that IAC created false financial information, lied about Tinder’s continued rapid growth, and delayed the launch of important features that drive the platform’s revenue, like Tinder Gold, in order to lower Tinder's valuation.
It’s a rather messy business.
Important! We’re sharing with you our thoughts on the companies in which Spaceship Voyager invests for your informational purposes only. We think it’s important (and interesting!) to let you know what’s happening with Spaceship Voyager's investments. However, we are not making recommendations to buy or sell holdings in a specific company. Past performance isn’t a reliable indicator or guarantee of future performance.
