Shares in Grindr (GRND), a dating app designed for LGBTQ+ people, trended higher on Wednesday afternoon. This came after the company’s board late on Tuesday confirmed the social network received a letter from two of its key stakeholders stating interest in taking the company private.
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The stakeholders are James Lu, chairman of Grindr’s board, and billionaire Raymond Zage, who is also a member of the board. Both stakeholders together control more than 60% of the company.
Insiders Eye Grindr in $3B Take-Private Deal
Grindr’s shares jumped as high as 16% on Monday after Semafor reported that Lu and Zage were discussing buying out the company at a valuation of about $3 billion. The decision reportedly came after a lender dumped GRND stock used as collateral by the two board members, forcing them into “a precarious personal financial position.”
According to reports, Lu and Zage proposed acquiring the company for about $15 a share via debt financing secured from private investment company Fortress Investment Group. However, Grindr has confirmed that it has not yet received a formal acquisition offer from the two stakeholders.
Nonetheless, the company has created a special committee of independent directors who would consider such an offer should it come with committed financing.
Grindr’s Global User Base Nears 15 Million
Grindr, which is based in California, was launched in 2009 by Israeli American tech entrepreneur Joel Simkhai. However, Simkhai sold a majority stake in the company to Chinese firm Kunlun Tech in 2016.
Later on, the Chinese company was forced to give up the company over data privacy concerns from the U.S. government. Subsequently, Zage and Lu’s San Vicente Acquisition LLC acquired Grindr in 2020 in a $608 million deal, taking it public in 2022 at a $2.1 billion valuation.
According to Grindr’s website, the dating app currently boasts almost 15 million monthly active users across 190 countries. The company describes itself as “the global gayborhood in your pocket.”
Is GRND Stock a Good Investment?
Turning to Wall Street, Grindr’s shares currently have a Strong Buy consensus rating, as seen on TipRanks. This is based on four Buys assigned by Wall Street analysts over the past three months.
Moreover, the average GRND price target of $22.75 indicates a 71% upswing potential from the current level. However, year-to-date, the shares have plunged more than 25%.
