Is Grindr self-imploding before our very eyes?

The monthlong saga over whether Grindr will go private ends like most of the chats initiated on the notorious hookup app: with radio silence.

The company’s two biggest shareholders, Raymond Zage and James Lu, failed to secure enough money for their bid to succeed, reports Reuters. They own more than 60% of outstanding shares and planned to receive $1 billion from lenders to finance the deal.

But the cash never materialized.

“The special committee has been unable to obtain satisfactory information about definitive financing,” the company said in a statement.

How about we take this to the next level?

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In response to the news, Grindr’s stock price fell by 12%.

The attitudes of dissatisfied users likely took a similar nosedive. For years, girls, gays and theys have complained about Grindr’s declining functionality and restrictive free version.

As Grindr adds even more features behind its ever-expansive paywall–including the ability to see “taps”–the discontent is reaching an apex

All the while, revenue continues to soar. Analysts expect Grindr to generate a record $430 million in sales this year, largely due to subscriptions.

And therein lies the conflict with being a public company: shareholders and consumers often have different interests.

That is, until the latter’s dissatisfaction affects the stock price. A new, juicy report on Grindr’s inner-workings reveals that’s exactly what happened with the world’s most popular gay hookup app.

Straight snooping

A tech publication called The Information outlines Grindr’s control issues. It’s previously been reported the event that spurred Zage and Lu’s efforts to take Grindr private was the company’s falling stock price. In July alone, it dropped 23%. The growth of monthly active users slowed, too (Grindr has 15 million active monthly users).

Officially, Grindr blamed the downturn in growth on aggressive software it employed to ban spammers and criminals. CEO George Arison said the company was focusing on “good” users and trying to eliminate bad actors.

A quick scroll through X or Reddit challenges Arison’s claims, as users flood social media with complaints about bots and catfishes. But it’s easy for Wall Street types to miss the discourse: they probably don’t know many Grindr users.

To fill the information vacuum, a mysterious Swedish investment banker who runs a little-known short-selling firm embarked on a snooping project.

He spoke with his gay friends, who relayed their annoyances with the Grindr experience. Specifically, they bemoaned the number of intrusive popup ads.

“It’s a prime example of enshittification that leads to user exodus,” said the investor.

When his short-selling report was released, the value of Grindr shares tumbled to $12, just above where it was when it went public in 2022.

A public future

The Information’s Cory Weinberg reports that Arison argues internally that Grindr being public is good for the company. He says the company benefits from Wall Street scrutiny and is positioned to advance LGBTQ+ rights.

“One way I talk to the team about it is: We’re a close to $5 billion company, and now I can go to the Hill, and I will meet with senators, and they’ll listen to what I have to say,” he said in a recent podcast interview. “But imagine if we are a $25 billion company. How much impact would we have on the world that way?”

So far, queer people would probably say Grindr’s impact on LGBTQ+ rights has been negligible, given the backsliding in the U.S. Weinberg mentions that Arison is a Republican, which likely works in his favor on Wall Street.

To appeal to investors, Arison has tried to sell Grindr as a “gayborhood in your pocket.” As CEO, he’s touted Grindr as more of a social network, de-emphasizing its real world application as a place to find hookups.

If that’s the public future Arison has in mind, it’s unlikely that frustrated users will be satisfied.

With three different owners in 16 years, Grindr continues its chaotic ride. In that sense, the orange demon app is staying on brand.

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