What Happened?
Shares of online dating app Bumble (NASDAQ:BMBL) jumped 5% in the morning session after the major indices rebounded (Nasdaq +1.5%, S&P 500 +1.0%) as reports pointed to easing tensions between Israel and Iran. The Wall Street Journal said senior Iranian officials had signaled a willingness to restart stalled nuclear talks, on the condition that Washington refrain from joining Israel's ongoing strikes. This development triggered a significant decline in oil prices, easing inflation concerns. Also, it is possible some investors were buying the dip following the sell-off at the end of the previous week.
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What The Market Is Telling Us
Bumble’s shares are extremely volatile and have had 30 moves greater than 5% over the last year. In that context, today’s move indicates 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 13 days ago when the stock dropped 5.2% on the news that JP Morgan downgraded the stock from Neutral to Sell and assigned a $5 price target, implying a potential 10% downside. The downgrade was attributed to challenges in the dating app market, particularly concerning "Gen Z product and market fit issues." The firm also raised concerns about competition from Hinge.
Bumble is down 34.4% since the beginning of the year, and at $5.23 per share, it is trading 50.8% below its 52-week high of $10.62 from June 2024. Investors who bought $1,000 worth of Bumble’s shares at the IPO in February 2021 would now be looking at an investment worth $74.31.
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