Why Bumble is overvalued

Yesterday Bumble had it’s initial public offering (IPO). The starting price was 43 USD, a valuation of more than 8 billion and it shot up to 76 USD, a valuation of over 13 billion.

Despite this high valuation, the company lastly made a net loss and only a few hundred million ($376.6 million) in revenue.

The Risk

The current market for Tech, EV and Cannabis stocks is in a hype bubble. I made profit with some overvalued stocks and currently sell these and rebalance my portfolio with more value stocks.

But this is not the only risk. I’ve used Dating Apps since multiple months (I also made a post about a problem with Tinder) and I think the market will evolve:

Enter the World of Facebook

Facebook launched its own Dating service: Facebook Dating

I think this will dominate the market in a few years — why?

Why should users register with Facebook on Third-Party-Apps if Facebook already provides a superior Dating experience?

Currently, many people don’t know about Facebook Dating, but Facebook is a Advertising Platform with a giant user base — so it should be very easy to gain more and more people until the competition dies out.

It looks like the Investors in Bumble aren’t aware that this big competitor is out there and the IPO money was needed for Bumble to have a chance fighting them.

Originally published at https://blog.m5e.de.

Software Developer and Investor from Germany. Writing about Software, Tech and Investments.

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