Bumble makes a buzz, pot stocks go up in smoke and Taylor Swift’s new ‘Love Story’

Bumble makes a buzz, pot stocks go up in smoke and Taylor Swift’s new ‘Love Story’

Bumble soars in its trading debut, pot stocks plummet after starting the week strong and Taylor Swift is releasing a re-recorded version of her 2008 hit “Love Story.” For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

Shares of Bumble, which operates a dating app under the same name, closed up 63.5% in its initial public offering Thursday on the Nasdaq.

The company’s stock began trading up nearly 77% at $76 per share under the ticker symbol “BMBL.” It priced the shares at $43 apiece, above its target range of $37 to $39, and sold 50 million shares.

The company closed trading with a market cap of about $7.7 billion.

On Bumble, founded in 2014 by CEO Whitney Wolfe Herd, women have to initiate the first conversation for heterosexual matches. At 31, Wolfe Herd is the youngest female founder to take a U.S. company public. She also joins the ranks of an extremely small list of women founders who led IPOs, including Stitch Fix’s Katrina Lake, who took her company public in 2017, and Julie Wainwright, who took The RealReal public in 2019.

Bumble has a “freemium model,” which means users can join and match for free. It earns the bulk of its revenue from in-app purchases and different subscription offerings like Bumble Boost, which starts at $12.99 a week, and its upgraded Bumble Premium, which starts at $17.99 a week.

The paid offerings let users do things like make their profile more prominent, see who’s liked their profile first or set themselves to travel mode. It’s a similar model to rival apps Hinge and Tinder, where users join and use the core functions for free but can pay for further use. For example, the price for Hinge’s “preferred” membership is $19.99 per month. Bumble also makes a small amount of money from advertising and partnerships.

The company said it had 12.3 million monthly active users as of Sept. 30. Speaking to CNBC before the company’s first trade, Wolfe Herd said the company is focusing its efforts on converting more of its user base to those paid customers by reinvesting in future monetization features and product offering.

Bumble said in its S-1 filing that it generated $376.6 million of revenue in the first nine months of 2020, with a net loss of $84.1 million. In that same time period in 2019, it brought in revenue of $362.6 million, and reported a net profit of $68.6 million.

The company’s main competitor is Match Group, which owns Hinge, Tinder and several other dating competitors, and has a market cap of $45.5 billion.

Bumble acknowledged its competition, but said in its prospectus that online dating “is not a ‘winner-take-all’ market.” The company said most people have an average of two different dating apps on their phones.

Goldman Sachs, Citigroup, Morgan Stanley and JPMorgan led the offering.

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