The majority owners of Grindr are now attempting to take the LGBTQ+ dating app private. This move comes after a decline in the company’s stock price triggered a significant personal financial crisis for them. According to a report, the owners facing this issue are Raymond Zage and James Lu. Zage is a former hedge fund manager based in Singapore, and Lu is a Chinese-American entrepreneur and former executive at Amazon and Baidu.
Together, Zage and Lu led the acquisition of Grindr from its Chinese owners for over six hundred million dollars in 2020. They later took the company public in 2022 through a special purpose acquisition company, or SPAC. Currently, the pair control more than sixty percent of Grindr’s shares.
It is reported that Zage and Lu pledged almost all of their shares as collateral to secure personal loans from a unit of Temasek, which is Singapore’s sovereign wealth fund. When Grindr’s stock began to fall at the end of September, the value of these shares dropped below the value of the loans. Because the loans became undercollateralized, the Temasek unit seized and sold some of the shares last week.
This stock decline seems unrelated to the company’s core business performance. Reports indicate that Grindr’s profits were up twenty-five percent in the second quarter, although the company has also experienced some executive turnover. There has also been some investor concern regarding the company’s narrowing profit margins.
In response to this situation, Zage and Lu are now said to be in talks with Fortress Investment Group to secure financing for a buyout. Fortress is itself majority-owned by Mubadala Investment Company, an entity owned by the government of Abu Dhabi. The proposed buyout price is around fifteen dollars per share, which would value Grindr at approximately three billion dollars. Following the report of these talks, the company’s share price increased significantly.