InterActiveCorp (IACI +2.5%) has reportedly paid $500M to own another 10% of popular mobile dating app Tinder, in which it has already been reported to have a majority stake. In spite of the sky-high price tag, shares are moving higher on the news.
IAC rallied in February as Tinder usage jumped amid positive Winter Olympics-related coverage. The app currently isn't monetized; Barry Diller says ads and subscriptions are being considered, as well as the adoption of a freemium business model.
Last month, SA author High-Conviction Ideas noted Tinder is on the verge of seeing 1B profile views/day (up from just 100M last August), and that users have been spending 60 minutes/day on average.
IAC had $1.3B in cash/investments to go shopping with at the end of 2013, and $1.08B in debt.
Update: An IAC exec has confirmed a deal took place, but says the reported $5B valuation is "nowhere near the truth."