Traders, bank workers and tourists weren’t the only ones around Wall Street Friday morning. Drag queens were also in attendance.
The group of performers, some known for appearances on the competition show “RuPaul’s Drag Race,” performed on a rainbow stage set in the front of the New York Stock Exchange. It was part of a celebration of LGBTQ dating app Grindr’s public-markets debut following a merger with blank-check company Tiga Acquisition.
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.”
He said on CNBC’s “Squawk on the Street” Friday about an hour after representatives from the company rang the opening bell that the small volume of shares available and interest in the company helped drive its first rally.
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.
“Can you imagine what those 250 people would be thinking if they saw us all here today?” she said of the protestors. “They would be celebrating the fact that through freedom of speech, they were able to pave the way for a more equitable future, a more equitable society – one that doesn’t discriminate on color of skin, race, gender or who you love.”
‘The power of the app’
The excitement around Grindr’s debut does not diminish the difficulties of the current bear market. 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 flailing, 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.
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 61 minutes per day on the platform.
“We do have this very unique engagement with our user base,” he said.
A bear market does not negate the long-term benefits from being public such as increased hiring potential, the ability to raise capital and potential mergers or acquisitions, he said. 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, Arison added.
Meanwhile, he said 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 actively 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.”
‘The picture is bleak’
Advocates say Grindr going public undoubtedly represents a milestone for inclusion within financial services, but it can’t overshadow the many areas where progress is still badly needed.
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.
“It says a lot that there were investors willing to tie their names to what this company is known for and help bring it to market,” Maldonado said. But, “this is not the one thing happening within our industry. There’s lots of different things that are happening to to continue the progress you’ve seen within the financial services community.”
There’s also a lack of standardized research into the support LGBTQ-owned companies receive when trying to raise funding, said William Burckart, the co-founder of Colorful Capital, which helps connect those businesses with capital. He also said these companies can struggle with few investors willing to take the lead, which requires the most risk.
Burckart said micro and macro-aggressions continue. He has heard from a woman owner who was told she’d need to bring a man with her to be “taken seriously.” A trans woman founder was asked “are you really a woman?” when going through the due-diligence process with an investing firm focused on gender.
“The LGBTQ plus community is kind of this … gray space on the economic map of the world,” he said, noting the fault is not on LGBTQ people themselves. “In reality, it’s kind of like, we know the picture is bleak to the extent that we can even see the picture.”
Still, 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.
And as Martin readied an excited crowd to watch Grindr leadership ring the opening bell Friday, she felt the importance of freedom of expression in the stock exchange.
“The only way we can move a society forward is a true expression of freedom,” she said. “And that’s why we’re so excited to celebrate the Grindr IPO today.”