The Market Continues To Bumble Up
Hey Jesstonks
The stock market 📈 has been an endless supply of drama lately with the battle for meme stocks playing out on the likes of GME, AMC, Nokia and Blackberry.
The news has since died down and Wall Street bets are looking for new targets, be it silver or doge who knows? The market now has time to revert back to what it does best, pumping money into unprofitable companies.
Stop comparing everything to Amazon
This is not by definition a bad thing, Amazon was unprofitable for years before it turned a profit! However Amazon’s a different story it’s TAM was far bigger than any of these new IPOs!
Ecommerce is a huge play and even then, they diversified into advertising, entertainment, social media, cloud services and more. Amazon spun off their brand and business several times to become profitable.
Other companies like the latest media darling Bumble don’t have that ability in my opinion. A niche dating site that was spun off from Tinder is hardly revolutionary or IPO worthy in my opinion!
Bumble has a good story
As I said before never underestimate a good narrative and Bumble has done that with some great PR. The company is majorly women led and product focused on females.
it’s CEO is now the youngest female Billionaire and the media tend to like these sorts of stories.
When you have a good story in this market you can surly gather backing from investors.
The Tinder takedown
Trying to take on the Match group that owns Tinder and other dating sites is a tough battle from the offset.
Even though Bumbles parent company MagicLab is owned by Blackstone Group which has billions to back it! MagicLab also run Badoo which is another dating app but focused more on European and other markets.
It’s going to be a challenge to grab a big enough piece of the market.
Another lyft vs uber battle to the death
The way uber and lyft burn capital to one up one another is insane, and this could play out in markets where Tinder and Bumble are both available. It will make it even more costly to acquire and hold on to customers and make profitability even harder.
Advertising across the web has also dropped so revenues might not be as good as they once were, while millennials are out of work and are cutting back on superfluous expenses like a dating app subscription.
So I see revenues being impaired there too, for quite some time.
Bumble or fall?
Bumble and Badoo posted $488.9 million of revenue (35.8% year-over-year growth) and $85.8 million in profits in 2019.
So far what we’ve heard is positive with the pandemic boosting the business, and the company logged $376.6 million and $40 million of revenue in the period from Jan. 29, 2020 to Sept. 30, 2020 and in the period from Jan, 1, 2020 to Jan. 28, 2020, respectively.
This does look favourable but its a combined return for MagicLab, as for Bumble exclusively.
The company trades in the $8 billion market cap range with total revenue of around $488 million per year but current expenses sit at $395,687 million.
Early pandemic trends isn't later pandemic trends
But this was the start of the pandemic, job losses and cash continue to dry up across the world so for dating apps to continue to get at your pocket is going to be tougher.
Have your say
What do you good people of HIVE think?
So have at it my Jessies! If you don't have something to comment, "I am a Jessie."
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