Grindr is going public with a $2.1 billion valuation

The LGBTQ+ dating app is going public through a blank check firm or Special Purpose Acquisition Company (SPAC) called Tiga, Bloomberg reports. They’re merging to form a combined entity with a $2.1 billion valuation, which will give Grindr access to $384 million in funds to be used for debt payments, as well as to support growth areas and to launch new endeavors.

Grindr Chief Financial Officer Gary Hsueh told the media organization in an interview that the company had been approached by several SPACs in the past. It ultimately chose the SPAC route instead of a traditional IPO, he said, because it makes more sense. “[I]t had certainty and that’s even more important today than it was a year ago when the market was different,” Hsueh explained.

As Bloombergnotes, SPACs became hot over the past couple of years after the pandemic made traditional IPOs much riskier than usual. They offer better returns and protections and could provide an easier route to become a public company. However, the market has become oversaturated of late, and at least one analyst told CNBC that the SPAC bubble is bursting. 

At the moment, Grindr’s revenue mostly comes from subscription, though it does earn some money from ads. It remains to be seen if a recent report that it sold user data would affect its future earnings: According to The Wall Street Journal, Grindr location data was for sale for at least three years, putting users’ privacy at risk. 

Nintendo predicts Switch sales will continue to slow this year

Nintendo sold (PDF) 23.06 million Switch units overall for the fiscal year ending in March 2022, over 5 million units fewer than its previous year. The gaming giant originally thought it was going to sell 25.5 million units this fiscal year, but it lowered its forecast to 24 million (and then 23 million) because the continued global chip shortage has made it difficult to procure components. In fact, the company most likely expects to continue grappling with supply chain issues, because it has lowered its forecast to 21 million Switch units sold for its next fiscal year ending in March 2023.

Nintendo’s sales were buoyed by the pandemic in previous years, with people purchasing new gaming consoles to get them through the COVID lockdowns. The Switch even became the company’s best-selling home console ever after total sales eclipsed 103.54 million units in the third quarter. Nintendo noted in today’s financial release that it has now sold a total of 107.65 million consoles.

Even though global lockdowns aren’t as regular, parts continue to be harder and harder to get, so the company’s forecast must also reflect that reality. Analysts and industry execs previously expected the chip shortage to persist throughout 2023, but Intel chief Pat Gelsinger recently said that the issue could drag on until 2024.

Nintendo also expects lower net sales and net profit overall in its next fiscal year. In FY2022, it reported net sales of 1,695 billion yen (US$13 billion) and an operating profit of 592 billion yen (US$4.6 billion). Next year, it expects its net sales to fall to around 1,600 billion yen (US$12.3 billion) and its annual operating profit to fall to $500 billion yen (US$3.8 billion). 

Despite the lower hardware sales, Nintendo has claimed the highest annual software sales for a single hardware family. It sold 39 million Switch games in its 2022 fiscal year, led by Pokémon Brilliant Diamond and Shining Pearl with 14.65 million units sold. Pokémon Legends Arceus, which sold 6.5 million copies in seven days, has sold 12.64 million units so far. Mario Kart 8 Deluxe sold 9.94 million units, while Kirby and the Forgotten Land sold 2.1 million units in just over two weeks.

Sony has now sold over 19 million PS5s

Sony announced that it sold just 2 million PlayStation 5 units last quarter (Q4), bringing its overall total to 19.3 million. That’s down considerably from the same quarter last year when it sold 3.3 million units. The company did manage to boost game sales, though, with 70.5 million PS4/PS5 titles sold compared to 61.4 million a year ago, including 14.5 million first party games compared to 7.9 million in Q3. 

Overall, its Game & Network Services (GSN) division earned 665 billion yen ($5.1 billion) this quarter, up slightly over last year. Sales for the full 2021 year were flat, up just 2 percent over 2020, and profits also changed little.

Those numbers mean that the PS5 is falling even further behind the PS4 in sales, having now sold 3.1 million fewer units than the PS4 at the same point in time. Sony warned that this was coming, blaming the lack of sales not on customer demand but its inability to build enough units due to the ongoing chip shortage. 

The good news is that Sony expects things to perk up quickly. It forecast a 34 percent increase in sales next quarter to 929 billion yen ($7.13 billion) due to better parts supply and higher sales of third-party games. Sony is also launching PlayStation Plus Extra and Premium, its take on Xbox Game Pass, in June. While PS Plus subscriber levels were flat, the new tiers could help draw subscribers next quarter and beyond. 

NVIDIA 付出 550 萬美元與 SEC 就出售 GPU 予礦工一案進行和解

美國證券交易委員會（SEC）以 2018 年時 NVIDIA 並未揭露加密貨幣在其爆增的營收中佔有「重要」地位，而起訴 NVIDIA。這主要是因為挖礦是個「不穩定的行業」，NVIDIA 如果未揭露其營收增長其實是來自於挖礦的話，有可能會誤導投資人以為這是遊戲市場的增長而帶來的收益。為此，NVIDIA 稍早與 SEC 和解，共付出了 550 萬美元的和解金。…

Florida pension fund sues Elon Musk over Twitter deal

Elon Musk’s $44 billion buyout of Twitter is facing its first legal challenge. A Florida pension fund is suing Musk and Twitter, arguing that the deal can’t legally close until 2025 due to the billionaire’s stake in the platform. The proposed class-action lawsuit — filed today by the Orlando Police Pension Fund in the Delaware Chancery court— also declares that Twitter’s board of directors breached its fiduciary duties by allowing the deal to go through. In addition to Musk and Twitter, the lawsuit also named former Twitter CEO Jack Dorsey, current Twitter CEO Parag Agrawal and the company’s board as defendants.

In a message to Engadget, Tulane Law School’s Professor Ann M. Lipton says the lawsuit raises “some very novel issues” under Delaware corporate law. Under a law known as Section 203, shareholders who own more than 15 percent of the company can’t enter a merger without two-thirds of the remaining shares granting approval. Without this approval, the merger can’t be finalized for another three years.

The fund’s lawyers state that Musk initially owned roughly 10 percent of Twitter’s shares, which would seemingly not make Section 203 applicable. But, the fund argues, Musk formed a pact with Morgan Stanley (which owns 8.8 percent of shares) and former CEO Jack Dorsey (who has 2.4 percent) to advance the deal. The combined stake of these parties allegedly makes Musk and his allies in the takeover deal an “interested shareholder” under Section 203 — which, if the court agrees with the underlying reasoning presented in the case, means the merger must either be delayed or get approval shareholders representing at least two-thirds of the company’s ownership. 

“Section 203 is not often litigated, and so the issue of whether Musk’s relationship with these parties actually counts for statutory purposes is an unsettled question and it will be interesting to watch how it unfolds,” wrote Lipton.

More details of Musk’s highly complex $44 billion buyout of Twitter have been made public since the social media platform accepted the billionaire’s offer last month. The New York Times reported that Musk promised investors returns of nearly five to ten times their investments if the deal went through. Parts of the deal are being scrutinized, including its reliance on foreign investors and whether Musk bought shares in the company specifically to influence its leadership. But antitrust experts say the merger is unlikely to be blocked by the FTC. The agency will decide in the next month whether to quickly approve the merger or launch a lengthier investigation.

Mining Capital Coin CEO indicted in $62 million crypto fraud scheme

Mining Capital Coin CEO and founder Luiz Capuci Jr. was — in an indictment unsealed yesterday — accused by the DOJ of allegedly running a $62 million global investment fraud scheme. He’s the latest of severalcrypto company heads who have recently been similarly charged.

Through his company, Capuci convinced investors to purchase “Mining Packages,” a global network of cryptocurrency mines that promised a certain return on investment every week. But instead of using investors’ funds to mine cryptocurrency as he promised, the DOJ alleges that Capuci diverted the funds to his own cryptocurrency wallets. Another MCC product known as “Trading Bots” operated under the same false pretenses. Capuci claimed that the bots operated in “very high frequency, being able to do thousands of trades per second” and promised investors daily returns.

“As he did with the Mining Packages, however, Capuci allegedly operated an investment fraud scheme with the Trading Bots and was not, as he promised, using MCC Trading Bots to generate income for investors, but instead was diverting the funds to himself and co-conspirators,” wrote the DOJ in its indictment.

MCC seemed to have all the workings of a pyramid scheme. Capuci recruited affiliates and promoters to lure investors. In return, he promised the promoters a number of lavish gifts, including Apple watches, iPads and luxury vehicles.

Currently the FBI’s Miami Field Office is investigating the case. The DOJ has charged Capuci, who is from Port St. Lucie, Florida, with conspiracy to commit wire fraud, conspiracy to commit securities fraud and conspiracy to commit international money laundering. If found guilty, he faces a maximum sentence of 45 years.

In a review of the cryptocurrency mining platform, crypto blogger Peter Obi noted that the combination of MCC’s $50 monthly fee for membership and its steep 3% withdrawal fee meant that investors were unlikely to make a profit unless they referred other investors. He pointed out that such a referral process was “particularly worrying” because it was consistent with other past crypto scams.

Indeed, a number of crypto leaders have been accused by authorities of running Ponzi schemes in recent years. Earlier this year the DOJ indicted Bitconnect founder Satishkumar Kurjibhai Kumbhani for allegedly running a $2 billion Ponzi scheme — believed to be the largest virtual currency pyramid scheme in history.

Capuci never registered his company with the SEC. The agency today issued a fraud alert for the company. According to the SEC press release, Capuci and his associates successfully convinced 65,535 investors to purchase mining packages worldwide and promised daily returns of one percent, paid weekly for over a year. In total, the group netted $8.1 million from the sale of the mining packages and $3.2 million from initiation fees.

NVIDIA pays $5.5 million to settle SEC charges over GPU sales to crypto miners

It’s no secret these days that GPU makers profited from the early cryptocurrency mining boom, but NVIDIA is now facing some repercussions as a result. The company is paying $5.5 million to settle US Securities and Exchange Commission charges it failed to disclose that crypto mining played a “significant” role in its surging revenue from GPU sales throughout fiscal 2018. NVIDIA allegedly violated both the Securities Act and Securities Exchange Act when it didn’t reveal that its success was tied to a “volatile business,” potentially misleading investors who might have thought this was the result of the firm’s usual gaming-focused strategy.

The SEC’s order also said NVIDIA misled investors by acknowledging that crypto demand did affect other aspects of its business at the time. That implied mining wasn’t a significant part of the gaming business’ success where it was for other products, according to the regulator. NVIDIA will have to abide by a cease-and-desist barring it from future rule-breaking.

An NVIDIA spokesperson declined to comment. The brand has increasingly seen crypto mining as more of a liability to its gaming GPU sales than a benefit, though. It started limiting the mining capabilities of RTX GPUs in 2021 in a bid to free up cards for the intended audience. The company even launched dedicated mining cards that year in a bid to satisfy crypto fans without cutting into demand for its GeForce GPU line.

The payment is tiny for a company that made $7.6 billion in its most recently reported quarter. With that said, the modest settlement was somewhat expected given an unsuccessful past attempt to demand compensation. Tom’s Hardwarenoted in March 2021 that a judge dismissed a lawsuit accusing NVIDIA of deceiving investors — it was no secret many GPUs were destined for crypto miners, the judge ruled. While the SEC found wrongdoing, it was going to have a harder time showing that NVIDIA caused enough damage to warrant a large penalty.

Meta will limit hiring this year due to slowing revenue growth

Meta is limiting its intake of new employees as part of its efforts to cut costs due to weak revenue forecasts, according to CNBC and Bloomberg. Facebook’s parent company is slowing the pace or pausing hiring for most mid-to-senior level positions altogether. It has started putting recruitment on hold, the sources said, after holding off on hiring new entry-level engineers over the past weeks. 

Facebook’s latest quarterly earnings results were better than expected, and its daily active users even bounced back a bit from last quarter. However, the company also expects a revenue drop next quarter in part because of the Russian invasion of Ukraine. Company CFO David Wehner said during the earnings call that Meta “experienced a further deceleration in growth following the start of the Ukraine war due to the loss of revenue in Russia as well as a reduction in advertising demand both within Europe and outside the region.” 

In addition, Facebook expects to lose $10 billion in revenue due to the changes in Apple’s privacy settings on iOS. Apple introduced a new feature earlier this year that limits advertisers’ access to the unique IDFA code associated with users’ devices. That identifier is what gives companies a way to link a user to their Facebook data and show them targeted ads. Facebook even rolled out a prompt asking users to allow the company to track their activity across websites and apps before the change was implemented in hopes to curb its effects on the company’s business.

A Meta spokesperson told the publications:

“We regularly re-evaluate our talent pipeline according to our business needs and in light of the expense guidance given for this earnings period, we are slowing its growth accordingly. However, we will continue to grow our workforce to ensure we focus on long-term impact.”

Insider previously reported on leaked internal memos, wherein Wehner said that the hiring freeze will last the rest of the year. It will affect almost every team across the company, which won’t be recruiting “engineers, managers and even some director level talent” throughout 2022.

NYC targets CEO Bobby Kotick in latest Activision Blizzard lawsuit

Activision Blizzard has been hit with another lawsuit, this time from New York City officials. The suit, which was first obtained by Axios, takes aim at CEO Bobby Kotick. It accuses him of being “unfit” to negotiate his company’s pending sale to Microsoft, citing his “personal responsibility and liability for Activision’s broken workplace.”

The suit was filed by the New York City Employees’ Retirement System and pension funds that represent police, teachers and firefighters. The plaintiffs, who own stock in Activision Blizzard, argue that the Microsoft deal allows “Kotick and his fellow directors a means to escape liability for their egregious breaches of fiduciary duty.”

Since last July, Activision Blizzard has been the target of multiple lawsuits. It has been accused of fostering a “frat boy” culture and some have made allegations of workplace harassment and discrimination. In March, a wrongful death suit was filed against the company. Activision Blizzard also said in a filing yesterday that it’s cooperating with a Securities and Exchange Commission investigation on “disclosures on employment matters and related issues.”

In November, The Wall Street Journal reported that Kotick was aware of many of the alleged instances of harassment and that he may have protected employees who were accused of misconduct. That report, and the alleged workplace problems, are said to have prompted the buyout. The companies announced the sale in January.

New York City claims the $68.7 billion Microsoft deal, which was valued at $95 per share, undervalues a company that was trading at close to that price before the California Department of Fair Employment and Housing sued it last summer and started a wave of litigation. The NYC plaintiffs are demanding access to various company documents, including those related to the pending takeover and details on the five other possible buyers that Activision mentioned in filings on sale talks.

Activision Blizzard shareholders last week overwhelmingly approved the Microsoft deal. The companies hope to close the merger by the end of June 2023, though they require approval from regulators in the US, UK, China, the European Union and some other markets. Should the sale go through, Kotick stands to make as much as $520 million.