On August 14, 2018, the co-founders of dating app Tinder and eight other individuals sued the app's current owner, Match Group (MTCH  ), and its parent company, IAC (IAC  ) (though a few days ago some of the plaintiffs dropped out of the case as they had previously signed arbitration agreements preventing them from suing).

The remaining plaintiffs are seeking $2 billion in damages, claiming that Match and IAC manipulated the valuation of the app, cheating them out of billions of dollars. The primary dispute is mainly over Tinder's 2017 pre-IPO valuation. Wall Street deemed the company worth $3 billion - the same value it had awarded the company in 2015. The plaintiffs argue that, based upon a boost in subscribers and revenue, their valuation should have been significantly higher. Though they have not officially stated how much the company should have been valued at, Tinder founder Sean Rad estimated it was many times more than the $3 billion they were given. It is Rad's contention that Match and IAC knowingly manipulated the data it provided to banks to keep the valuation artificially low, overestimating costs and rounding down potential growth. Though Rad was on Tinder's board at the time of valuation, he had no opportunity to review what Match and IAC reported to the banks and thus could not verify its accuracy.

In the suit, the plaintiffs also claim that when they first developed Tinder at Hatch Labs, IAC's business incubator, they were promised a majority stake in the company and significant control over the project, but that once Tinder took off and actually achieved success, they were given options worth only 20% of the company.

"We're here to preserve our rights and fight for what's right, for what was promised to us," Sean Rad said in an interview. The plaintiffs are serious about seeking reparations: they have retained the services of Orin Snyder, a celebrated tech attorney who has represented Google (GOOGL  ), Facebook (FB  ), and Uber in courts. They may need all of Snyder's talents to go against deep-pocketed Barry Diller, the owner of IAC and Expedia (EXPE  ), the giant travel website.

In a public statement, IAC characterized the lawsuit as spurious, said that it had obtained the valuation from two rigorous and independent global investment banks, it would defend itself vigorously against it. IAC added that Tinder founder Sean Rad and other former executives "may not like the fact that Tinder has experienced enormous success following their respective departures, but sour grapes alone do not a lawsuit make." IAC also accused Rad of making "outlandish public statements."

The stocks of both IAC and Match - which rely on Tinder's steady profitability - were down at the news.