Why Bumble (BMBL) Shares Are Sliding Today

Jabin Bastian /
2023/11/08 9:26 am EST

What Happened:

Shares of online dating app Bumble (NASDAQ:BMBL) fell 6.5% in the pre-market session after the company reported third-quarter results with revenue slightly below estimates due to weaker-than-expected ARPU growth. Furthermore, its revenue and adjusted EBITDA guidance for the next quarter underwhelmed. Adding to investor discomfort was the recently announced departure of CEO and Founder Whitney Wolfe Herd. Many called out the curious timing of the announcement, which was right before earnings that in hindsight, featured many negatives. On the other hand, Bumble beat analysts' adjusted EBITDA and EPS expectations during the quarter Regardless, this was a tough quarter for Bumble.

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What is the market telling us:

Bumble's shares are very volatile and over the last year have had 29 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move we wrote about was two days ago, when the stock dropped 7.8% on the news that CEO and Founder Whitney Wolfe Herd announced she is stepping down from her role at the company. The move comes as a surprise, especially with the company about to report its Q3 earnings. Herd will be replaced by Lidiane Jones, who previously served as CEO of Slack. Herd's departure serves as a cautionary flag for investors when considering that sentiment around the dating category has also been subdued for the past year. Saturation of the market is top of mind for investors as paid subscriber counts are slowing after getting a boost from the pandemic.

Bumble is down 39.6% since the beginning of the year, and at $12.35 per share it is trading 55.7% below its 52-week high of $27.86 from February 2023. Investors who bought $1,000 worth of Bumble's shares at the IPO in February 2021 would now be looking at an investment worth $175.65.

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