Grindr on the NYSE, November 18, 2022.
Source: NYSE
A little over six months after Grindr’s debut, the leadership of the LGBTQ+ men-focused dating and dating platform is establishing itself as a public company and laying out a roadmap for the future.
The stock initially surged after going public in November through a merger with blank check company Tiga. According to industry insiders, this was a milestone in the integration of LGBTQ+ people into the financial industry. The shares, now trading under ticker symbol GRND, are a far cry from their first close at $36.50. For most of 2023, the stock traded at around $6 a share.
Since its November 18 debut, Grindr has begun wooing investors, making the necessary adjustments to become a public company, while making innovative plans for the future of the product. This trip came amid a shifting market, with stocks recovering after the broad sell-off of 2022.
It also takes place at a unique intersection between LGBTQ+ inclusion and the business world. Public companies such as Disney, Goal and Bud Light parent Anheuser-Busch Inbev have been criticized by a broadly conservative base unhappy with community involvement measures. This has also had an impact on the performance of these stocks.
Seven months on the public market
In the seven months since Grindr officials rang the opening bell, CEO George Arison has shifted his focus to matters relevant to a public company, like hiring specialists over generalists and increasing liquidity.
He and company leaders have attended banking conferences, raising the company’s profile on Wall Street. Last month, Grindr’s leadership was at an event hosted by JPMorgan in Boston. Arison was surprised by the high level of investor interest in these conferences, noting that there was one conference in March that featured back-to-back meetings from 8:30 a.m. to 5:30 p.m
Certainly not all investors who meet with management buy. Arison noted that some banks did not welcome at conventions; He declined to give names. However, he believes that a stock like Grindr — which has an uncompromising focus on the LGBTQ+ community and champions sex culture — is now accepted by more people than if the company had gone public just a few years ago.
“I don’t think that would have been the case ten years ago,” he said. “I think if you asked people, they would say, ‘Oh, nothing would have been different.’ But I think it would have been very different.
Grindr stock followed the typical tech story, but on an even larger scale. Shares are up about 20% in 2023. The stock fell 54% in 2022, considering the SPAC’s share price of about $10 before the merger. In comparison, bumblebee And match group lower at the end of 2022. In 2023, Match shares are roughly flat, while Bumble is down about 18%.
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Grindr’s stock since the IPO
Grindr doesn’t have coverage of Wall Street firms yet. The final earnings call consisted of questions from retail investors on topics like whether board members are using the app or whether web-based competitors are an issue. The stock caught the attention of the Wall Street Bets Reddit page, which rose to prominence in the investing world for becoming a major discussion forum for meme stock actions. A new competitor has also joined the field: Match Group launched its dating app Archer on June 1, which focuses on gay, bisexual and queer men.
Some believe the overall environment for dating apps is improving, although Grindr’s leadership is quick to note that the platform offers more than just that. According to a Morgan Stanley report released earlier this month, online dating penetration continues to rise despite fears the market is becoming saturated. The company found that demand is increasing, with 65% of online daters planning to increase usage over the next year.
Arison said he’s confident the stock will do well as long as the company stays on its path of innovation.
“The reality is that what I and my team have control over is executing a plan and exceeding people’s expectations,” he said. “If we deliver quarter after quarter, the stock will take care of itself.”
George Arison, CEO Grindr, on the NYSE, November 18, 2022.
Source: NYSE
Who is behind the stock?
According to FactSet, just over 6% of shares are available for public investors to buy and sell. That means most stocks are held by institutions and large retail investors.
The top institutional investor is 12 West Capital Management, which owns about 2.7% of the stock’s total shares, a position worth $28 million. Prescott Investors, the second-largest institutional shareholder, recently reduced its stake to almost half its original stake and now owns a stake of around $14 million, or 1.3% of the total.
Big names like Vanguard, BlackRock, and Charles Schwab also have small holdings, each accounting for less than 0.2% of total shares. All of these institutional investors either did not respond to CNBC’s requests for comment or declined to be interviewed, with many noting that it is not company policy for them to discuss individual holdings.
The logo of the “Grindr” app can be seen on a mobile phone screen alongside other dating apps.
Getty Images
G. Raymond Zage, a Grindr board member who also runs Tiga, is the largest single investor with more than 45% of all shares. Chairman of the Board James Fu Bin Lu held the second largest position with around 22% of the total available positions.
A “gay super app”
Grindr is also busy planning the future of the app. Arison called the product a “completely open book” and said it has the potential to become a “super app” for the community it serves.
Arison was pleased with the extensive free functionality that made it a social network and community space. Grindr has about 13 million monthly active users across the globe, company data shows. The average user will spend 58 minutes a day on the platform by the end of 2022.
“When people see the out-of-this-world level of engagement on Grindr, they’re like, ‘Wow, there’s no way you can be used as a dating-only product,’ because nobody… comes close to that level Commitment approaching.” ,” he said.
However, he also sees an opportunity for further monetization as the number of paying customers is lower than that of its competitors. In the first quarter, there were roughly 866,000 paying customers, which accounts for less than 7% of total monthly users.
Arison said Grindr has an opportunity to grow in international markets: as other countries become more welcoming of LGBTQ+ people, this may encourage community members to feel more secure on the app.
An ad-free offering is an idea to attract more paying users, but the company also sees the potential to provide more targeted advertising for companies that want to target LGBTQ+ people.
Another idea is to add a feature that allows users to “move” their profile to other locations and be found in other areas, which may be attractive to regular travelers. Grindr also recently launched a web offering that may offer more features at an additional cost in the future.
LGBTQ social networking platform Grindr is hosting a public show outside of the New York Stock Exchange (NYSE) as the company reopens following its merger with Special Purpose Acquisition Company (SPAC) Tiga Acquisition Corp. going public in New York City on November 18, 2022.
Spencer Platt | Getty Images
The company is also interested in expanding part of the platform to focus more on dating, with artificial intelligence potentially playing a role in the future.
But Arison pointed out that this doesn’t mean the company will move away from other uses of the app, such as for contacts or community-related information. He cited Grindr’s role in spreading information and resources around mpox over the past year as an example of how users are using the platform for purposes other than just meeting other community members. This summer, the app is partnering with the Pan American Health Organization to educate LGBTQ+ communities about mpox.
“We don’t hide that sex is at the core of the product. If you’re looking to invest in Grindr, you need to realize that sex is a really big part of gay culture, and sex is a really big part of Grindr,” Arison said. “But there is a lot more going on in the app. I don’t think anything has changed, that’s just the reality for us.”
“We want to be the gay super app,” he said.