Bumble’s Billions And Tilray’s Finest

I don’t remember when it was. A few months ago, maybe.

Sometime before I decided to all but stop tweeting (outside of links to articles), I idly mentioned on Twitter that I “don’t know what a Bumble is.”

Fast forward several weeks and while I still can’t claim to understand exactly what Bumble does, I do know one thing: It was valued at some $14 billion after rising as much as 85% in its debut as a public company Thursday.

Does that make any sense? I have no idea. The S-1 shows “Bumble Holdings” generated roughly $377 million in revenue from the end of last January through the third quarter. The net loss on that was more than $84 million. There’s a pro forma column that includes figures from a predecessor entity. Eventually, some math gets you to a 26 cents per share loss for the nine months ended September 30. On the next page, there’s some unaudited results from 2019 which show an 82 cents per share loss on revenue of $477 million.

I don’t think it really matters. It’s not like turning a profit is something anyone cares too much about these days. It was just nine months ago when retail investors were bidding up shares of bankrupt companies on Robinhood, and lest you should forget, GameStop was “worth” more than $34 billion just two weeks back.

Needless to say, Bumble’s first-day jump raised familiar questions about a broken IPO process. Asked whether she “left money on the table,” 31-year-old CEO Whitney Wolfe Herd kind of dodged the question, emphasizing instead that investors aren’t “joining us on our journey today just for tomorrow” (try saying that a couple of times fast, then try typing it). Rather, investors are “signing up for [a] very long road to try and make relationships healthier and more equitable.”

Speaking from personal experience, that’s a tall order. “Healthy” relationships are rarely spotted in the wild. Relationships that are both “healthy” and “equitable” are like Nessie: Sure, it’s possible they exist. But as far as anyone knows, the pictures we have purporting to show them are fakes.

I’m just kidding. Sort of. Regular readers are accustomed to my sense of humor.

To her credit, Wolfe Herd, who co-founded Tinder, at least acknowledged that fundamentals matter. “We are running a business and we understand that we need to show up and operate and hit earnings and beat earnings,” she told Bloomberg. In an investor letter, she said “this pandemic has proven that loneliness is not the way we were designed to live.” COVID, Wolfe Herd remarked, has shown the “true benefit of online dating.” Dating probably won’t “ever revert back to how it was,” she added.

One thing that did “revert back to how it was” on Thursday was Tilray. 24 hours after surging 50% in one session, it fell 49.7%. Similarly, the popular “Alternative Harvest ETF” dropped nearly 25% after an astounding three-day run.

These may seem like non sequiturs. And in a way, they are. Then again, I think the visual (below) is yet another testament to how far afield we perhaps are in markets. In the absence of a bankruptcy filing or some kind of materially awful corporate news, it’s not normal for a stock to shed 50% of its value in a single session. Unless of course it rose 50% in the prior session for no reason, which isn’t normal either.

Tilray’s drop was technically its largest ever, as was the ETF’s daily loss. But again, I’m not sure it makes sense to couch things in those terms. The ETF was coming off its largest three-day upside move in history. “Due for a pullback” was an understatement.

Commenting to Bloomberg, Morningstar’s global director of ETF research Ben Johnson summed it up perfectly. “The market has a pretty bad case of ADHD these days, and the latest shiny object for what has been a rabid retail crowd is cannabis stocks,” he said.

I don’t know if weed is a good treatment for ADHD. I imagine Bumble, to the extent it’s a social network, would just exacerbate the symptoms.

On the bright side, Bumble’s Wolfe Herd became the youngest woman ever to take a big company public in the US. That’s unequivocally admirable and I, for one, wish her and Bumble all the best, although I wouldn’t personally touch that stock even if I was under the influence of Tilray’s finest.

As of Thursday afternoon in New York, Wolfe Herd’s stake in Bumble was worth $1.5 billion. She’s a self-made, female, billionaire founder.


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4 thoughts on “Bumble’s Billions And Tilray’s Finest

  1. Such is the fodder for comparing nowaday to .com days. Bumblebubbles’ assuming that dating will not get back to normal is a bit absurd. After all great disruptions humans seem to get back to it with gusto. Looking at past wars and pandemics it is amazing to see how populations make such quick comebacks.

    1. “dating will not get back to normal is a bit absurd”

      I’ve lived long enough to see some pretty profound changes in dating and hookup practices and can honestly say that, I don’t think things will return to “normal”. It all changed with the internet. All the newest dating/hookup apps & sites are merely refinements, and they work
      A 72yo widower client of mine just met his new girlfriend on a dating site and is thrilled the resource was there for him. It avoids the tedium of churches, bereavement groups, and book clubs

      I knew the world had profoundly changed about 10 years ago when I discovered that there were people in a crowded bar who were actually on one of the dating/hookup sites to search for people standing close to them.

  2. “Tilray. 24 hours after surging 50% in one session, it fell 49.7%.”

    The Redditors need to pick their targets batter. GME was a brilliant pick because of the mega-short interest. But also because I doubt there were many “stranded longs” sitting with underwater positions they were hoping to sell “someday”. (Due to inertia, human nature, reluctance to book a loss etc.) For example, I punted part of a legacy Nokia holding and a friend pitched his Macy’s stock. We thanked the Redditors as we did so.

    I would not be surprised to learn that there were many similar stories in TLRY.

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