Tinder co-founder and ex-CEO Sean Rad took the stand in a blockbuster trial Wednesday to accuse Barry Diller’s media companies of swindling him and other executives out of billions of dollars.
Rad told jurors that Diller’s Match Group and IAC knew Tinder should be worth at least $13.2 billion during a key valuation process in 2017, but that Greg Blatt — a longtime Diller ally who succeeded Rad as Tinder CEO — gave misleading figures to investment banks working with Match.
The banks then valued Tinder at just $3 billion as it was absorbed by Match, resulting in a nearly $400 million payout to Rad that the founder says was far too low. He and the other co-founders are seeking $2 billion in damages from Diller’s Match Group, which also owns other dating apps like Hinge and OkCupid.
“The defendants — Match Group, Greg Blatt — were all talking about numbers in excess of $10 billion,” said Rad as he spoke about what he alleged were internal conversations about the company’s valuation in 2016.
As evidence, Rad’s camp pointed to what they said was a 2016 email thread in which Gary Swidler, Match Group’s chief financial officer at the time, suggested that possible “defensible” valuations of Tinder ranged from $7.05 billion to $11.75 billion.
“Yes,” replied Blatt, according to the text of the emails that were shared with jurors by Rad’s attorney Orin Snyder.
Rad’s camp also offered what they said was evidence that the company repeatedly suggested to potential recruits — who were being offered stock options — that Tinder could be valued at up to $15 billion. Snyder showed New York State Supreme Court jurors Power Point presentations that Blatt and other executives had allegedly shared with prospective hires in 2016.
One of the slides teased potential valuations of between $2 billion and $15 billion, while another included a range of $2 billion to $10 billion.
“You’re showing valuations up to $15 billion because we believe Tinder is worth potentially up to that,” Rad said.
In Rad’s telling, Match executives who wanted to minimize his payout suddenly changed their tune in the lead-up to the 2017 valuation process that stands at the center of the case. Blatt shared “doom-and-gloom” projections with the two investment banks — Barclays and Deutsche Bank — that Match had hired to independently evaluate the value of Tinder, Rad claims.
Blatt also refused to share key Tinder data with bankers from Jefferies who were working for Rad, the co-founder claimed.
“He’s basically saying, f—k off,” Rad said of an April 2017 conversation between a Jefferies banker and Blatt.
Match spokeswoman Justine Sacco said in a statement to The Post that Rad’s testimony was “speculative, irrelevant and mind-numbing.”
“They have no evidence,” she said. “Instead of evidence, we looked at hypothetical recruiting decks, text messages between unrelated parties and emails containing more conspiracy theories.”
Rad’s testimony is set to resume on Friday morning when he is expected to be further questioned by Snyder and cross-examined by attorneys for Match. He is the first person to testify following the trial’s opening statements.
After Match Group and IAC finished their opening statements Tuesday evening, Susquehanna litigation analyst Thomas Claps wrote that “both sides have offered compelling and contrasting stories of improper conduct” and that “neither side has a strong advantage at this stage.”
“We continue to believe the trial presents significant risk for IAC/MTCH, especially given the potential reputational harm that could be caused by unflattering testimony regarding alleged corporate misconduct at the highest levels of the company,” Claps wrote in an investor note late Tuesday. “Both sides will be presenting highly credentialed experts to opine on complex valuation issues, which could result in an unpredictable “battle of the experts” that the jury will have to decipher.”
Claps predicts Match will opt to settle the suit for $300 million to $700 million rather than endure “intense cross-examinations” of Diller, Blatt and other witnesses scheduled for the coming weeks.