Semafor reports that the primary stakeholders of Grindr are urgently attempting to regain private ownership of the LGBTQ+ dating platform following a drop in stock value that precipitated a personal financial emergency.
Raymond Zage, a former hedge fund executive and U.S. expatriate currently residing in Singapore, and James Lu, a Chinese-American businessman formerly with Amazon and Baidu, are the owners in question. In 2020, they spearheaded the acquisition of Grindr from Chinese ownership for a sum exceeding $600 million, and subsequently took the app public in 2022 via a special purpose acquisition company (SPAC) merger.
According to reports, Zage and Lu, who collectively possess over 60% ownership of Grindr, committed nearly all of their shares as security for personal loans obtained from a division of Temasek, Singapore’s sovereign wealth fund. Following a decline in Grindr’s stock value starting in late September, these loans became undercollateralized (less valuable than the outstanding debt), leading the Temasek division to seize and sell a portion of the shares the previous week.
The decline in Grindr’s stock price seems unrelated to the company’s underlying business performance – Semafor points out that profits increased by 25% in the second quarter, although there has been some executive departures; furthermore, there has been some anxiety among investors regarding declining profit margins.
Regardless, the two are reportedly in discussions with Fortress Investment Group – which is now primarily owned by Mubadala Investment Company, itself controlled directly by the Abu Dhabi government – to obtain funding for a buyout at approximately $15 per share, giving Grindr a valuation of roughly $3 billion. The stock price increased following the publication of the report.
