Leopold Riola Bardaji v. Match Group, Inc., Sharmistha Dubey, Bernard Kim, and Gary Swidler

Bernstein Litowitz Berger & Grossmann LLP is leading a case against Match Group and three of its current and former executives, concerning (1) Match Group’s integration of Hyperconnect—a South Korean “social discovery and video technology” company acquired for approximately $1.7 billion in June 2021—into its existing group of online dating services and (2) Tinder’s new product offerings throughout 2022—which were supposedly going to reverse the decline in Tinder user numbers, revenue, and profitability. The case centers on statements made by Sharmista Dubey (Match Group’s former Chief Executive Officer), Bernard Kim (Match Group’s current Chief Executive Officer), and Gary Swidler (Match Group’s Chief Financial Officer) between November 3, 2021 and January 31, 2023.

Lead Plaintiff Northern California Pipe Trades Trust Funds alleges Dubey and Swidler misrepresented that the integration of Hyperconnect into Match Group’s portfolio of dating apps was “going extremely well” when, in fact, there was no integration of Hyperconnect’s technology into the other Match Group apps during 2021, there was minimal integration of Hyperconnect’s technology in the first half of 2022, and Hyperconnect had underperformed financially since it was acquired. All of this led to Match Group disclosing a $217 million impairment charge related to Hyperconnect as part of its second quarter 2022 earnings on August 2, 2022. On this news, Match Group’s common stock price fell 17.5%, or $13.47 per share, on August 3, 2022.

Lead Plaintiff also alleges that Dubey, Swidler, and Kim misrepresented that two new product features for Tinder—Explore, an interactive social discovery interface, and Tinder Coins, a virtual currency that users could earn when using the app and use to pay for things in the app—would be “the harbinger for Tinder’s long-term vision.” In truth, Explore was a “dud” soon after it was introduced, and Tinder Coins received “baffled to negative” user reaction in pre-launch research. Yet Dubey, Swidler, and Kim repeatedly assured that execution of Explore and Tinder Coins remained on track and would drive revenue in 2022. On January 31, 2023, Match Group reported disappointing financial results due to “weaker-than-expected product execution at Tinder, the effects of which became more pronounced as the year progressed.” On this news, the price of Match Group’s common stock declined 5%, or $2.71 per share on February 1, 2023.