Contributed by: kellyseal on Monday, October 03 2022 @ 09:05 am
Last modified on Monday, October 03 2022 @ 09:18 am
Barry Diller, owner of IAC Corporation, has sold off his remaining shares of Match Group for approximately $1.9 billion, according to Global Dating Insights[*1] .
The media titan is founder and chairman of InterActiveCorp (IAC), which owned Match Group before it spun off into its own entity. It split from IAC to become a public company in July 2020, which caused a rift with the former owner of its star dating app Tinder, Sean Rad. He and several other Tinder employees sued the company, claiming that their shares were undervalued ahead of the public offering when they were forced out.
Diller’s initial sale of Match stock began in 2021 when he sold his first round despite the company’s impressive growth during the pandemic. But since 2022 began, the stock’s value has fallen 60 percent, in part due to earnings expectations for Tinder falling short the last two quarters. The app’s steady growth is now expected to remain flat through the end of the year.
Bernard Kim, the new head of Match Group, has pointed to Tinder’s failed marketing initiatives (like the launch of Tinder Coins), as well as the war in Ukraine, which has affected international revenue streams.
According to Blooomberg Law[*2] , this might not be the whole story for Diller’s sale of Match Group stock. In September, the news outlet reported that Diller and board members of IAC had been sued for dodging the litigation the Match Group corporation faced by spinning it off. Plaintiffs alleged that Diller loyalists “engineered the deal as part of a scheme to extract $1.5 billion in cash from Match, leaving it saddled with debt and subject to their control.”
The plaintiffs also pointed to a conflict of interest by the special committee established to handle the deal, which hired Goldman Sachs as a financial adviser despite the bank’s investment positions.
A Delaware judge ruled against the plaintiffs, saying that the special transaction committee handling the deal was not beholden to Diller. The lawsuit’s criticisms amount to simple “disagreements with the separation committee’s strategy,” the judge found.
According to the judge’s ruling, the committee “met at least 20 times, consulted with its own legal and financial advisers, considered the implications of saying ‘no’ to the separation, and successfully negotiated benefits for the minority.” She also found there was no negligence in hiring Goldman Sachs, either.
Still, the spinoff of Match Group has been fraught from the beginning. Now the company is also suing the App and Play Stores, which require a commission from every in-app purchase but don’t allow app developers to use third party payment systems, essentially locking them into paying (and giving up revenue).
Analysts seem to be excited for Kim to take the reins, as well as the potential growth for Match Group in the dating app industry in general, but new apps are emerging that might give the company some competition.