SPACs are dead. Why did Grindr use one? – New York Magazine


Who Says SPACs Are Dead?
Photo: Spencer Platt/Getty Images

On Friday morning, as Grindr prepared to go public on the New York Stock Exchange, the dating app for the wider gay and queer community threw a party. To celebrate the milestone: Grindr is the largest LGBTQ+ company to go public and the first to be listed on the NYSE, Grindr hosted a drag brunch on Wall Street; Lady Bunny and Saucy Santana would perform outside.

The storied two-century-old exchange, which normally bans even blue jeans and sneakers from its trading platform, suspended its dress code so that the Grindr delegation could ring the opening bell with what felt comfortable. “We’re very grateful that the New York Stock Exchange is helping us waive some of their rules,” said Grindr’s new CEO, George Arison. “We’ve told our employees that there are no rugs or flip-flops,” a spokesperson said, explaining that the company, whose app is also known for its abundance of thirst-trap photos, still planned to be respectful

The occasion brought some levity to Wall Street at a time when IPOs and public listings have all but dried up amid a rocky market. “The old school center will go big!” the spokesman added. Grindr’s move was all the more unusual because it went public through a special-purpose takeover company, a once-fashionable maneuver that fell out of favor in 2021. Regulators pursued the SPAC; Goldman Sachs stopped making them public; billionaire hedge fund manager Bill Ackman close its record SPAC after failing to find a company to acquire. From the SPACs that did go public, sob stories abounded. One of the only companies still following the unpopular strategy has been Donald Trump’s social media company. He has been unable to get out of the door, stuck regulatory control and other concerns.

Which begs the question: why did Grindr take the SPAC route when it has become a dirty word on Wall Street?

“There was a time when Tinder and Match were seen as unbankable, and there was concern about incumbent risk,” says Ray Zage, one of the investors who acquired Grindr in 2020 and a backer of the SPAC. Match Group now has a market capitalization of nearly $13 billion. “What you really need for a SPAC to be successful is to list a good company at a good price,” he added, noting that Grindr is financially healthier than many of the founder-only SPACs. “We hope this is a highlight of why SPACs are a useful tool. When was the last time you saw a wave of IPOs priced in, especially in the tech sector? The reason we can – it is because we have a good transaction.”

Arison says that Grindr has long been misunderstood, perhaps perceived as a sex app and a sex app rather than a safety and education tool, and that the listing gives it a formal opportunity to describe its business with each quarterly report of earnings “Grindr started as a casual dating (aka hookup) app. There’s no disputing that; we all know that,” he says. “We have this very strong brand, but people don’t know what it means . Going public will be very good, not only from a market perspective but from a reception perspective.”

Unlike a traditional IPO, where companies rely on banks to guide them through the offering and sell them to Wall Street, SPACs allow companies to avoid much of that process. Other companies that have chosen to go public through a SPAC have been “a bit out of the loop,” says Usha Rodrigues, a professor of corporate finance and securities law at the University of Georgia School of Law. This includes those with a political bent that could tip off the banks. (Trump’s SPAC, for example, or Black Rifle Coffee Company, which sells a ‘thin blue line’ medium roast.) “And it may be that these companies, and Grindr is one of them, feel they can better control more of their destiny rather than jumping into a white-shoe investment bank,” he adds.

Grindr has had its share of controversy in recent years: it was acquired in 2018 by a Chinese company, which had to turn around and sell it after the United States raised national security concerns. Then there was the data privacy scandal involving the reported departure of a priest based on your location data. Grindr has since then stopped sharing this data with advertisers.

Arison says she wondered if she would face weird questions or homophobia when she first started talking to investors, but Wall Street proved more welcoming than she had anticipated. “I was very pleasantly surprised by how much less stigma I felt compared to what I expected,” says Arison. “Investors were pulling out their phone saying, ‘I’m on Grindr.’

He sees Grindr’s stock price as a symbol of how far the world has come in recent decades: The New York Stock Exchange was once the site of the protests against the high cost of AIDS drugs in 1989. “I think it’s definitely a sign of progress that a company like us can go public,” Arison says.

The stock debuted under the ticker GRND and ended the first day of trading up more than 200 percent.

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