The Market Continues To Bumble Up

in LeoFinance2 months ago

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.

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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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All I can say is that at least they're profitable unlike Uber which is a terrible business model. Unsustainable and the consumers get shafted in the end.

Uber was never going to be profitable with humans driving they just using it as data for mapping out routes and working out the bugs the eventual goal is automated driving not that I think that was the original goal it just sort of moved there with time

I think they’re just another wework that went further than it should, same with lyft!

I don’t like this whole Amazon blueprint like it’s so genius keep funding and undercut competitors to raise prices later is hardly a business model but okay what do I know I’m not a bajillionaire

For me it is a fact that the real business of these companies is to capture information that we ourselves provide when we open an account in these applications. On the other hand these companies are money recycling machines, Amazon for example does nothing but buy back their own shares, so they keep their activity in the stock market on the rise, of course, they at least have managed to adopt technological advances in their business but the rest are only dedicated to this coming and going of money to pretend to be successful.

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Yeah and Amazon does also reinvest in R and D but it is very much a rent seeker. I am sure these dating sites also have deals with ad tech platforms to sell your data on and make extra income.

I can’t see running only ads and subscriptions keeping those apps alive when trends show people are moving to using less apps, and the reasons I mentioned In this post

Pretty sure many of these latest round of IPOs are just there so that investors could exit not because the company brings anything viable to the public markets

She should make a Bumble coin that users can buy and stake for perks lol. Or make a crypto dating site, does one exist? Where people who are in to crypto can meet up (assuming the conversations won't break down into tribal warfare and endless shilling haha)

I am disappointed you didn't start your comment with, BUMBLECLOT!! Investing in Bumble could turn into a big bumblehole. Pretty sure dating apps aren't exactly ones where ownership and privacy of data really works.

The person who launches the first crypto dating site will have a shit show on their hands, spammers and shillers galore, no one getting laid everyone too busy arguing

LOL! A Bumblehole app may draw it's own unique users!

It would be fun to watch the shilling and social awkwardness as tribalism kicks in. Can't imagine that site would last too long haha

I am a Jessie once again. Though having a woman sit on the spotlight interest me a lot.

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Yeah that was the main narrative people took out of it because shes the youngest female billionaire but I like to look past what they tell us and see what the market is trying to say

Pretty good argument that people might close their subscription to dating sites/apps, because of budgeting reasons. A counter argument might be that people are more on those apps, because of lockdowns and are in need of social contact, especially those who are alone in one bedroom apartments 🤷‍♀.
Are those numbers already available? I mean the numbers of subscribers; was there an increase or decrease since March last year?

I can accept that people may use the app more because of lockdowns and they can probably earn some revenue through ads to their userbase, but with apps like clubhouse, Instagram, tiktok and other social media services they can always steal away your customers, especially once they make a connection via your app, whats the point of saying in it, they can leave.

Also dating apps don't make money if they are a good service, if you meet someone in a dating app and you start dating you don't need the app, meaning its a lost customer, they need to sell you the hope of a date not a date itself.

Nope, the numbers will probably only release end of march where we can review their first quarter, so it will be interesting to see how they get on.

Yup, it'll be interesting to see those numbers and make an analysis.

Good point, if the app is really helping where it's supposed to be and people really find their match they don't need the app anymore. In that case dating apps should expand or rebrand their product. I do know that some people only use Tinder to hook up though so maybe that's also still happening. Don't really know how Bumble works apart from what you've written. But indeed a good story could only bring you so far.

Enjoy the weekend 😊

Bumble has expanded more than Tinder to do friend finding and business connection finding but I don’t know how well thats going since trying to make business connections is more of a LinkedIn thing

Let’s wait and see what Q1 data looks like

Precisely what I thought... People use LinkedIn for business connections/networking. And I don't see myself opening up another account for that; there are enough platforms to socialize, etc. Anyway, let's just wait and see how they'll be able to survive.