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Bumble Stock has Fallen 55% Since IPO, Will Things Ever Change?

Ollie Martin - AskTraders News writer
Ollie Martin trader
Updated 7 Jan 2022
  • After a heavy fall from it's IPO, Bumble might be struggling to keep up with competition
  • Scrambling for new strategies amidst slowing growth, how will the company turn it around?

The list of application-based dating services grows as digital interaction cements its place in the social environment. Bumble (NASDAQ: BMBL), an online dating company that went public in February 2021; seems to be a story of two sides.

Bulls seem to back to the growing revenue of the company and its ambitious growth, but the market seems to think differently – stock price has dropped over 50% since the company’s IPO, leaving investors wondering…when will things change?

On paper, it’s difficult to appreciate Bumble in the wider playground of Match Group; owners of Match, Tinder, and multiple other dating apps. It’s not that Bumble isn’t profitable, it’s just the rate at which the company is attaining new subscribers, which, looking at quarterly earnings – appears to be trailing off slightly.

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Although Bumble’s 2.89 million paid users in Q4 was up 3% year-on-year; the number was down 5% from Q3, alluding to a slightly worrying lag in growth rate. 

You might blame the sell-off on the arrival of the new variant, and fears of lockdowns decelerating the practicality of dating. Yet Bumble CEO, Wolfe Herd argues that the business remained ‘largely unaffected'.

Now, this is where Bumble’s innovation becomes a partial player in its potential long-term success. Biting at the heels of Match and its competitors, Bumble incorporated dating features that depend on the public health situation around them; such as “night in” trivia. 

This isn’t the end of Bumble’s interesting ‘extras’; they’ve tried opening a restaurant for meet-ups, an online clothing store, and more…but does that make the company investable? These dubious strategies could pull further users, but it seems to me like Bumble might be clutching at straws. 

Ollie Martin - AskTraders News writer
Oliver is a financial writer and analyst specialising in the US stock market, with years of personal experience in understanding micro/macroeconomic structures, market trends and fundamental analysis.