There’s a good reason why executives in companies winding through initial public offerings steer clear of journalists: to avoid having to explain unflattering articles to the Securities and Exchange Commission.
On the eve of its IPO, Online dating empire Match Group found out the hard way on Wednesday after the U.K’s Evening Standard published a raunchy interview with Sean Rad, the co-founder and CEO of Match’s Tinder. The company ended up having to go the unusual step of quickly filing the article publicly with the SEC – and throw Rad under the bus by correcting some of what he said in it.
“The article was not approved or condoned by, and the content of the article was not reviewed by, the Company or any of its affiliates,” Match said in the filing. “Mr. Rad is not a director or executive officer of the Company and was not authorized to make statements on behalf of the Company for purposes of the article.”
Match also pointed out that the analyst estimates quoted in the Evening Standard, which peg Tinder’s user base at 80 million and about 1.8 billion “profile swipes” per day, are wrong. In fact, Tinder has 9.6 million daily active users, who execute 1.4 billion profile swipes per day as of September, the company says.
Under SEC rules, companies about to go public cannot make statements about their business that aren’t included in their public filings, which includes interviews with the press. This is so all investors have access to the same information without preferential treatment.
In this case, Rad spoke about his sex life and seemed to misuse some explicit terms. In short, the article didn’t exactly paint him as a typical suit and tie.
Though its IPO pricing appeared to be delayed by a few hours, presumably because of this incident, Match Group eventually set its price late Wednesday at $12 per share, on the low end of its expected range.
Although Match’s SEC filing is rare, it’s not the first time a tech company has had to do it. In 2004, as it was about to price its IPO, Google (GOOG) got into hot water after Playboy magazine published an interview with co-founder Larry Page and Sergey Brin. Google quickly republished the interview in the filing along with some corrections like the number of employees it had. Of course, Google’s IPO ultimately did just fine and its shares have since soared.
Match Group will probably never work on self-driving cars, Internet-connected air balloons, and commercial drone deliveries, as Google does now. But it may be comforting to be in good company when it comes to unplanned SEC filings.
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(The story has been updated with details of Match Group’s IPO price.)
