There is a new dating app on the market.
Grindr
(ticker: GRIND), the app geared toward the gay, bi, trans and queer community, started trading on the New York Stock Exchange Friday after merging with blank-check company Tiga Acquisition in a $2.1 billion deal.
Grindr soared 202% to $35.11 on its first day of trading. At points on Friday, the stock was up more than 400%. That surge was a function of the interest in the company as well as the low float of the stock of about 500,000 shares, Barron’s reported earlier.
While Grindr’s coming out Friday morning was lively—including performances from drag performers Lady Bunny and Jorgeous at the New York Stock Exchange—the Los Angeles-based company faces a challenging time. This year’s volatile markets have made it difficult for companies to go public. Grindr’s already public peers
Match Group
(MTCH) and
Bumble
(BMBL) have fallen 64% and 31% respectively, this year.
But the dating and social networking app is taking a longer-term view toward its engagement as a public company.
“The long-term benefit of being public is what makes the most sense and timing the market is usually not a very successful exercise,” Grindr Chief Executive George Arison told Barron’s. He also noted that by going public via an already trading special purpose acquisition company (SPAC), the company can avoid some of the volatility seen in a traditional initial public offering where pricing is a function of investor demand.
As a public company, Grindr can grow its business with a lower cost of capital and be able to tout publicly listed shares as a tool for employee retention and recruitment. But as the premier social app for the gay community, Grindr sees something else special about going public and having the requirement to tell the company’s story on a quarterly basis.
“It’s going to be valuable to the community and I think that goes for the employees at the company. More broadly, I think there is a real story around that of just being a beacon for equality and helping create awareness,” Ray Zage, chairman and chief executive of Tiga, told Barron’s.
Of course, as a public company Grindr will have to sell its financial story to the public and that comes with challenges and opportunities.
Revenue for the first half of 2022 climbed 42% to $90 million with adjusted earnings before interest, taxes, depreciation, and amortization of $42 million, up from $33 million in the same period of 2021. This comes as only 6% of its users pay for its service, according to an investor presentation. That is compared with 9% at Bumble and 18% at Match-owned Tinder. Finding ways to monetize its user base, which spends on average an hour on the site daily, will be key to winning over Wall Street for the long term.
Arison noted that some options for monetization could involve travel assistance—either ideas for recreation or to provide safety tips for travelers in countries where being gay is illegal. Other options could include a product for monogamous couples who may not be looking to date others but would like to be part of the online community.
For the near term, Grindr will have to wade through challenging markets. The first day pop Friday got attention but stocks with low floats can be especially volatile. Grindr is also working to monetize its user base at a time when consumers are starting to feel pinched amid fears of a recession.
That said, a downturn may give more reason for people to want to pair up.
Scenes From Grindr’s NYSE Bell Ringing
Write to Carleton English at carleton.english@dowjones.com
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