Grindr’s majority owners are rushing to take the LGBTQ+ dating app private after a falling stock price triggered a personal financial crisis, according to a report by Semafor.
The owners in question are Raymond Zage, a former hedge fund manager and current US expat based in Singapore, and James Lu, a Chinese-American entrepreneur and former Amazon and Baidu executive. They co-led the acquisition of Grindr from its Chinese owners in 2020 for more than $600 million, then took the app public in 2022 through a blank check merger.
Together, Zage and Lu reportedly control more than 60% of Grindr’s shares and pledged nearly all of their shares as collateral for a personal loan from a unit of Singapore’s sovereign wealth fund Temasek. After Grindr began to decline in late September, these loans became undersecured (valued less than the debt) and Temasek’s unit seized and sold some of its shares last week.
Grindr’s stock price decline appears disconnected from the fundamentals of the business. Semafor noted that despite the executive changes, second-quarter profits were up 25%. Investors are also concerned about shrinking profit margins.
In any case, the companies are said to be currently in talks to secure financing for the acquisition at about $15 per share with Fortress Investment Group, which is majority-owned by the Abu Dhabi government-owned Mubadala Investment Company, valuing Grindr at about $3 billion. Following this news, the stock price soared.
