• Grindr stock debuted on the New York stock exchange on Friday
  • Popular LGBTQ dating app went public through a blank-check SPAC merger
  • The LGBTQ social platform hosted a drag show outside of the New York Stock Exchange to celebrate what employees sees as an indicator of how far financial services and society has come in regards to LGBTQ acceptance.
  • Advocates say it is an important moment, but can’t overshadow the issues still facing LGBTQ people in financial services.

If you noticed drag queens hanging out at Wall Street Friday morning from “RuPaul’s Drag Race,” on a rainbow stage set in the front of the New York Stock Exchange you weren’t hallucinating. It was part of a celebration of LGBTQ dating app Grindr’s public-markets debut.

Under its new ticker $GRND, the company began trading on the NYSE at $16.90 per share on Friday, leaping to a high of $71.51 during the session. Share value more than doubled to $36.50 when the market closed.

Grindr CEO George Arison, who is about a month into the job, has been quick to cite the debut as a reflection of broader inclusion of LGBTQ people, both within finance and more broadly.

“It’s a pretty incredible thing that the company whose primary user base is gay and bisexual men, built by and for the LGBTQ population, with an employee base that is heavy in that cohort of the population as well, is now going public,” Arison said. “It’s not something that would not have happened 20 years ago, probably wouldn’t have happened even 10 years ago.”

That’s not exactly true see below about PlanetOut ($LGBT) and the gay media that was literally delisted in 2009.

Grindr’s party featured a stage for drag queens, with attendees that included employees, financial services professionals, volunteers for LGBTQ community groups and social media influencers. The New York Stock Exchange was lined with rainbow markers and pride flags in recognition of the event.

Before the opening bell, New York Stock Exchange President Lynn Martin spoke about the importance of an LGBTQ-centered company’s place in the equities market. Indeed, it was only in 2015 when the U.S. Supreme Court ruled that the Constitution guarantees same-sex marriage rights. Martin was one of multiple speakers who noted the poignancy of the platform having this celebration in the same neighborhood where the first of multiple demonstrations protesting for more awareness of the AIDS epidemic happened about 35 years ago.

The excitement around Grindr’s debut does not diminish the difficulties of the current bear market. These kind “bears” are not a good thing. Information technology and communication services stocks specifically have been hit hard, with those S&P 500 sectors respectively down 24.5% and 37.8% so far this year.

Grindr’s debut also comes in a year when other dating apps are in a house of pain, with Bumble
and Match plummeting 31.7% and 64.9% since the start of the year. Grindr’s reputation is mixed, with some saying it is more known for hooking up than dating, but the company is branding itself as an online community space.

The app is also being challenged by Motto, a new, unlisted platform created by Grindr founder Joel Simkhai. He left the company five years ago. You can read our interview with Joel Simkhai here in our 10 Questions series.

Arison said Grindr will separate itself from competitors by pitching, in part, that it’s more akin to a social network given LGBTQ-themed resources on topics around HIV-preventative medicine and monkeypox as well as company data that shows the average user spends over an hour per day on the platform.

In addition to goals of continuing to expand monetizable offerings like subscriptions and profile “boosting,” the company could look at adding elements like travel recommendations to enhance the user experience.

Grindr is excited to share what he calls a strong business model with Wall Street. He said the first half of 2022 saw $90 million in revenue, which shows a 42% growth compared with the same period a year ago. The company also saw 26% year-over-year growth in adjusted EBITDA.

Arison said Grindr is unique because it spends only 1% on revenue on marketing due to its high brand awareness within its target audience of people who identify as men interested in others who identify as men. It had about 11 million active monthly users spanning nearly every country in the world in 2021.

He said any concerns about how homophobia could impact trading performance have been washed away through meetings with investors and others in the finance world who seem interested in the business and how it could trade. Grindr is expected to see a total addressable market of $4 billion for the entirety of 2022.

Arison was surprised to see the “understanding of the power of the app for the community and its users, and how much understanding investors have for what the app does for people,” he said. “That was super encouraging and exciting.”

But really, now?

Only 765,000 paying users on Grindr. They have a potential of growing that number by a large percentage while it also looks bleak from many other angles.

Banks have overwhelmingly moved to support gay marriage and equality, said Michael Maldonado, a communications chair of the advocacy group Out in Finance. But Maldonado said financial services can still exclude people who don’t fit into a straight, white and cisgender picture, pointing to the difficulties faced by photo- and video-sharing platform OnlyFans, known for its use for monetizing sexually explicit content, when trying to go public.

He pointed to the specific hurdles transgender people face trying to enter the field and the lack of inclusion of LGBTQ-owned businesses in the environmental, social, and governance investing space as two areas that still need improvement.

Maldonado and others note that Grindr’s success could lead to it getting analyst coverage or potentially indexed, which would increase its reach. Arison said it adds to a picture of progress that was improved this week with the House of Representatives passing a bill that would codify gay marriage.

Planet Out (Gay.com) Delisted

It was just back in 2009 when PlanetOut owner of Gay.com (the hookup and dating website before Grindr) was delisted from the Nasdaq.

When it was delisted a reader remarked “PlanetOut Inc. just stopped trading today…gone.” Indeed, LGBT is no longer being traded; the company’s market cap was just $1.55 million with shares priced at $0.380. In December 2004, LGBT traded at $136. This same thing could happen to Grindr stock as you can imagine it will be shorted by investors.

PlanetOut was operated under the auspices of Here Media, a name change engineered when PlanetOut’s media assets (Out, The Advocate) merged with Paul Colichman’s Here TV and Regent Entertainment Media.

When PlanetOut joined the Nasdaq after its 2000 founding, it was heralded as a particularly special moment in gay history: The first all-queer company to trade on a stock exchange. The dream was realized, then extinguished.

Bottom Line

Grindr debuted a successful IPO on the market today to an excited crowd to watch Grindr leadership ring the opening bell. It brought out an importance of freedom of expression in the stock exchange. The financial news covered it as a positive thing just like they did back several years ago with PlanetOut but this time people have more faith in an app that is somewhat addictive to many users. Grindr could grow because it still has under a million upgraded subscribers. They have so many users using it free there really is no other way but up but how long will it last?