Why $BMBL Went Down

Turnaround Essay

Bumble’s stock price fell when the company reported mixed financial results and issued guidance below analyst estimates. Bumble said second-quarter revenue increased 18% year over year to $220.45 million, which beat the estimate of $219.44 million. They also reported a quarterly net loss of 3 cents per share, which missed the estimate for a loss of 1 cent per share. One reason why they missed this estimate was due to higher operating costs and an increase in the membership price which made many users cancel their membership. I had originally predicted that this won’t happen with Bumble even though it happened to bigger competitors like Tinder however, I was wrong. The reason why I thought of this was that Tinder is usually the first app every person uses in order to find a dating partner; however, when they start to increase their membership prices, many of these users could move to cheaper and smaller companies like Bumble. In the same way that Walmart’s customers moved to smaller chains such as Albertsons. This was wrong as Bumble’s existing users also decided to cancel their membership. Through this, I learned that inflation can affect every company, especially the ones that aren’t non-essential to people such as dating apps. From now, I will pay much more attention to the other companies that are in the same sector as the company I'm doing research on and will try to see how it translates to it.