The Ghost Train
FINANCE GHOST: Is love a hopeless place for investors?
Investors are giving Bumble and other dating apps a decidedly cold shoulder
As South Africans celebrated Women’s Day, the headlines erupted with news of Bumble’s stock plummeting. The app that is famous for allowing women to make the first move suffered a sell-off of nearly 40% from peak to trough on Thursday. Things aren’t exactly roses and champagne at Match Group (the owner of Tinder and Hinge) either, with that stock down 24% over 12 months vs a 66% decline at Bumble.
Whitney Wolfe Herd, the founder of Bumble, stepped down in late 2023 after a decade of running the company. There was much celebration around the time of the IPO in 2021, with women inspired by Wolfe Herd’s story and the listing of Bumble. Investors who cannot resist hype stocks have learnt another hard lesson here, as the IPO price of $44 was pushed to more than $75 when the stock listed. It’s now below $6. There’s nothing quite like a 12-bagger in the wrong direction! It is almost always true that IPOs should be avoided, especially when they happen in frothy markets accompanied by...
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