GRND Stock Sinks After Board Halts Buyout Discussions Over Financing Concerns

• Board Special Committee cited uncertainty over financing as reason to pause the buyout.
• Board Members Ray Zage and James Lu collectively own more than 60% of Grindr’s shares.
• The two executives acquired Grindr in 2020 and took it public in 2022.

Shares of Grindr (GRND) sank on Monday after the company disclosed that its Board of Directors’ Special Committee decided to hit pause on the proposed buyout from major shareholders Ray Zage and James Lu.

GRND’s stock dipped as much as 8% in pre-market trade. On Stocktwits, retail sentiment around the company fell to ‘bearish’ from ‘bullish’ territory over the past day, with chatter at ‘high’ levels. 

The Offer That Got Rejected

Zage and Lu, along with affiliated entities, collectively own more than 60% of Grindr’s shares. They had offered $18 per share to take the company private in October, earlier this year. The committee said the decision to halt the proposal stemmed from “continued uncertainty as to the financing” behind the transaction.

The company said the committee also asked for details on the financing behind the proposal, but didn’t receive satisfactory information, prompting the pause in discussions. 

“After careful consideration, the Special Committee has unanimously determined that further discussions with the Proposing Shareholders with respect to the Proposal are not in the best interests of the Company or its shareholders at this time,” said Special Committee Chair, Chad Cohen. 

Zage And Lu

Had the deal gone through, Zage and Lu would have consolidated control over the LGBTQIA+ dating platform at a time when the sector faces growth challenges. The two executives acquired Grindr in June 2020 and led the company’s public listing in November 2022.

Grindr joins other industry players such as Match Group (MTCH) and Bumble (BMBL) in facing slower user growth. Critics cite “swiping fatigue” and a shift among younger users toward AI-driven and niche matchmaking alternatives as key headwinds.

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