Why popular LGBTQ+ dating app Grindr may soon go private
What's the story
Grindr, a popular LGBTQ+ dating app, may soon go private as its majority owners face a financial crisis. The development comes after a recent decline in the company's stock price. Raymond Zage and James Lu, who together own over 60% of Grindr, have pledged most of their shares as collateral for personal loans from a unit of Singapore's sovereign wealth fund Temasek.
Financial impact
Stock decline leads to executive turnover and investor concerns
The stock decline, which started in late September, has left the loans undercollateralized (worth less than the debt). This prompted Temasek to seize and sell some of Zage and Lu's pledged shares last week. Despite this setback, Grindr's profits were up 25% in Q2. However, there have been reports of executive turnover and investor concerns about narrowing margins.
Negotiation
Buyout talks with Fortress Investment Group underway
In light of these developments, Zage and Lu are in talks with the Fortress Investment Group for financing a buyout at about $15 per share. This would value Grindr at roughly $3 billion.
Ownership transition
Grindr's ownership history and potential future challenges
Grindr was originally owned by Beijing Kunlun Tech before being sold to San Vicente Acquisition LLC for over $600 million in 2020. This sale came after the US Committee on Foreign Investment raised national security concerns. Now, as Zage and Lu consider taking the company private, its future remains uncertain amid these financial challenges and market fluctuations.