Before there was Tinder, which just won a student the Ira Sohn contest for best write up for an "underappreciated valuation" in IAC, there was Adult Friend Finder, aka FriendFinder Networks, a website whose sole purposes was finding, to put it bluntly, a fuck buddy.
And just like Tinder, back in 2011 when the early stages of the current gargantuan tech bubble were only taking shape, nobody could hide their enthusiasm about the stock.
BizJournals recalls the froth accompanying the IPO of that particular "matchmaking" site:
The FriendFinder IPO was first announced in 2008, but was received critically in the depths of the recession.
At first, the company posited that it could raise more than $400 million, according to SEC filings. But that amount shrank as the IPO was delayed.
Mark Albright, a Miami attorney who handles securities law, but was not involved in the FriendFinder deal, said he recalls its IPO came on the heels of those for Angie’s List, Yelp and LinkedIn.
“It looked like they were following behind the success of other social media companies. Outside of Florida, I don’t think FriendFinder had the same appeal as LinkedIn or the Silicon Valley names,” said Albright, a founding partner with Perlman, Bajandas, Yevoli & Albright. “At the time, I believe Penthouse Media companies were profitable, where the others weren’t. So it wasn’t a sexy IPO, so to speak, but it was credible.”
Sex toys, porn stars
When the IPO finally happened, it raised $49 million. FriendFinder shares have been in a virtual tailspin since it went public, and NASDAQ sent the company notice of delisting, which it is appealing.
Dvorkin alleges that, while the stock was tanking, Bell gave himself a raise and spent corporate money on things like “gift baskets of sex toys to non-businesspeople, funded restaurants and clubs, promoted the opening of a restaurant, used private planes for non-business purposes, hosted parties, dinners, trips, hired prostitutes and made payments to porn stars.”
This is what happened to the shares of AFF since going public: it lasted just 2 years before going, er, tits up.
This time, however, it's all different. Because you see: Tinder, unlike AdultFriendFinder, is "mobile"; it also has hides no ambitions about profitability in the near, or not so near future (AFF actually had positive EBITDA when it went public). And that's all that matters for the current generation of sophisticated investors: eyeballs (or in this case some other anatomical organ).
And then there is of course, Ashley Madison "a website for cheating spouses", which is looking to raise $200 million for its own unique set of ethically-fluid services.
Incidentally, the BizJournals article was titled "Prominent investors lose their money after FriendFinder IPO finds few friends on Wall Street." Fast forward to 2017 when the very same article will be republished, only with Tinder or Ashley Madison instead of FriendFinder. Because contrary to Fed-inflated popular delusions, it is never different this time.