Grindr’s owners may take it private after a financial squeeze

The majority stakeholders of Grindr, the popular LGBTQ+ dating platform, are reportedly pursuing a private buyout following a significant decline in stock value, as detailed in a recent Semafor report. This financial predicament involves Raymond Zage, a former hedge fund manager now residing in Singapore, and James Lu, a Chinese-American entrepreneur with a background in Amazon and Baidu. Zage and Lu initially acquired Grindr from Chinese ownership for over $600 million in 2020. They subsequently took the company public in 2022 via a special purpose acquisition company (SPAC). Together, they hold more than 60% of Grindr's shares, which they pledged as collateral for personal loans from Temasek, a branch of Singapore's sovereign wealth fund. However, following a decline in Grindr's share price that began at the end of September, these loans became undercollateralized, prompting Temasek to sell off some of their shares last week. Despite this downturn, Grindr's business fundamentals appear strong, with a reported 25% increase in profits during the second quarter. Yet, concerns surrounding executive turnover and narrowing profit margins have raised eyebrows among investors. Currently, Zage and Lu are in discussions with Fortress Investment Group, which is predominantly owned by Mubadala Investment Company, linked to the Abu Dhabi government. They are seeking financing for a potential buyout at approximately $15 per share, which would place Grindr's value around $3 billion. Following these revelations, the company’s stock experienced a notable surge.