Blackstone made over $2 billion (as the public got wiped out), taking advantage of Consensual Hallucination. No victims here.
By Wolf Richter for WOLF STREET.
Bumble Inc. which owns dating apps Bumble and Badoo, dished up another hot prospect last night – in sort of a quarterly routine by now – when it released its Q2 earnings: It cut its outlook for revenue growth to a range of 1-2%, from its prior outlook of 8-11%, against average expectations of 8%.
“We are resetting our guidance today to reflect actions we are taking to position Bumble to reignite user growth, deliver improved customer value, and drive long-term revenue growth,” it said.
Shares kathoomphed 40% this morning to a record low of $4.83 a share and later in the morning traded down 32% at $5.44 a share, down by about 94% from the intraday high on the second day after its IPO pop in February 2021, and down by 87% from the IPO price.
The Q2 earnings release follows the Q1 release that also featured a downbeat forecast, punctuated by layoffs and plans to relaunch the Bumble app and refresh the Premium Plus subscription.
Bumble went public via IPO in February 2021 amid enormous hoopla and at peak Consensual Hallucination, as we have come to call it. The IPO price was set at $43 a share. The first trade was at $76 a share, making for a massively hyped “Pop.” On the second day of the Pop, shares hit an intraday high of $84.80, giving it a market cap approaching $10 billion. Shares have slumped and re-slumped ever since.
The company’s two dating apps went into different directions in terms of revenue growth in Q2: Bumble’s revenues grew 4.8% to $218 million in the quarter; Badoo’s and “other revenues” fell 2.2% to $50.6 million. Total paying users increased 14%, but revenues per paying user fell 9%.
It did make money, unlike a lot of the other creatures out there: net income in the quarter rose to $37.7 million, and for the first half, it rose to $71.6 million.
The company made it into our pantheon of Imploded Stocks in March 2022, when the quarterly earnings report at the time took shares down 18% for the day, to $19 a share, and down 78% from the intraday high in February 2021. Shares had plunged by 78% in 13 months by that time, and the heavy lifting was done.
Since the high in 2021, its market capitalization collapsed from $10 billion to $686 million.
But Blackstone made a huge amount of money on this deal.
The IPO was when PE firm Blackstone began dumping this creature into the lap of the public, in what has been an epic and perfectly legal pump-and-dump operation.
In November 2019, Blackstone announced that it was buying a majority stake in MagicLab for $2 billion. The deal valued the whole company at $3 billion.
MagicLab owned the dating app Bumble, the international dating app Badoo, gay dating app Chappy, and over-fifty dating app Lumen (in 2020, Blackstone shut down Chappy and Lumen). The seller was Russian billionaire and Badoo founder Andrey Andreev, and he was out. Bumble founder and CEO Whitney Wolfe Herd became CEO of MagicLab.
Then come the paydays for Blackstone.
It extracted a special dividend of $300 million from the company, in typical PE firm manner.
During the IPO in February 2021, Blackstone sold a chunk of its shares for $2 billion, leaving it with 98.23 million shares.
In September 2021, in a secondary share offering, Blackstone dumped another 20.7 million shares for about $1 billion, bringing its haul to $3.3 billion from the sale of shares and the dividends.
In March 2023, the 13D/A filing with the SEC revealed that Blackstone had sold another 11.76 million shares, reducing its stake to 65.79 million shares, or 39.5% of Bumble. If it got an average of $35 a share, it would have produced another $467 million in proceeds, bringing the total to $3.77 billion.
In March 2024, 13D/F filings revealed that Blackstone had sold another 11.7 million shares, reducing its stake to 54.08 million shares, or 35.8% of Bumble. If it got an average of $15 a share, it would have produced another $175 million in proceeds, bringing the total to close to $4 billion, on a $2 billion investment, while the public got cleaned out.
That’s the latest filing we have. Blackstone is likely still out there dumping its shares as the price collapses. It has been selling shares at a rate of about 1 million per month. By now, its stake might be down to 50 million shares, at $5.44 a share, or about $272 million a today’s price. So what’s left is just a mop-up operation, in terms of cleaning out the public.
You can see the filings on our special WOLF STREET page for each company whose ticker we list (via Fintel). For Bumble’s data, including SEC filings, short interest, etc., click on the ticker [BMBL] and then scroll down.
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You have to admit, sure Bumble lived up to its name.
How is the criminal enterprise legal???
Vanguard would never attempt anything like this, I’d hope. Keep your money there or invest in their funds …almost 8 trillion in assets managed. :)
You
Can shear sheep twice a year
Blackstone
Makin Bank
Look at GUTS.
same story different symbol. IPO at $15. Now less than $2.
That too in the same year.
Loot the innocent investor.
Funny the gay app was’t called Bumble, rather Chappy.
Chappy huh, thanks for cluing me in. I’m not having any luck with Grindr anymore. I think it’s my profile picture with my smile. Too many teeth for some people, and not enough teeth for everyone else. Must be an all or nothing kind of thing, know what I mean Lance, buddy, wink, wink! Hey, what are you doing this Saturday night? Can I call you Sir Lance-a-lot?
Gotta love asset stripping
There was some news/hope last week that investors would be shifting money away from large cap stocks to small cap. It didn’t really happen.
I wonder how many small cap companies have been hooked and are being drained by PE firms?
That’s really unfortunate because these roll-ups can wreck the character of a local firm, if not gut the firm completely.
OK…Where’s the SEC?
They’re at Blackstone’s beach house in the Hamptons
This is why Blackstone is Blackstone.
I’m quite interested where the SEC goes in the wake of the Supreme Court’s Loper-Bright decision, which stripped away all kinds of agency regulatory power (and threw it to courts, which can be forum-shopped to produce anti-agency judgments). Also, SCOTUS radically enlarged the time period when firms can sue agencies to challenge regulations, and ruled that SEC’s enforcement actions must largely be jury trials. Also, the President’s immunity (so, impunity?) is greatly enlarged. This puts a lot more pressure on who gets elected to Congress and the Presidency. A deadlocked Congress (or GOP majority) can mean completely handcuffed agencies. I think this altogether will mean pretty massively a dip in agency powers and actions. Then a certain candidate is all in favor of all kinds of go-go financial stuff, being opened to consumers.
So we can be citizens again….and not subjects.
Its a small step, much more is necessary for this republic.
You forgot the /sarc tag!
Tom10 knows much more about the Constitution than Escierto. But I’ve noticed Escierto has a special hatred for the US.
I’m the only one of my siblings that never used a dating app. Two found their spouses via a dating anpp and a third currently has a GF from a dating app. As a millennial, I find many friends/family used dating apps. The dating space in general is a giant s*show but dating apps have only perpetuated hookup culture and vapid personalities. I only hope and pray between now and my dying day that I can avoid this scene.
Nothing wrong with it except it should not be a good investment. There is no incentive to keep paying once a partner is found, which creates perpetual client acquisition problem.
Easy to get a partner, almost impossible to get rid of them.
30% of households are single adults, in 1940 it was 8%.
Not sure what I’m getting at but it has something to do with peace of mind.
Would “Why buy the cow, when the milk is free, help.”
…mebbe it’s akin to reducing yet another human interaction to a convenience-store shopping experience…
may we all find a better day.
You can avoid and proud u do.
Same here, as a millennial, I’ve used dating apps because it’s virtually the only way to meet people now, but online dating is so much worse than when I used to be able to meet people organically. You’re competing with ten times as many people on a level that’s completely superficial, and paying for the privilege. Not to mention all the bot accounts and the casino-like manipulation tactics these companies try to pull on you. I stopped using those apps a while ago.
Did you ever try to meet people in real life? Like when hiking or travelling or even at a restaurant or at your sports club? If you live in a big apartment/condo building, there you go! There are people everywhere. I know, I know, people don’t do that stuff anymore. But I see them doing this stuff, and when it clicks it clicks. It’s heartwarming to watch. It still happens. You just have to try.
Game is a dying art
Game should be a dead art. Just have an actual personality, and you’ll meet someone who suits you at some point.
Yes nothing like reality. Walking the street, being among other people. Forest, Lakes, Mountain dance floor. What happened when entrainment took over the real world. Please bring back kindness, hard work ethic and conversation.
Supermarkets are good for that. Girls/ladies/females in general show interest in guys shopping alone; no ring, bingo if the chemistry working. They do prowl.
There’s always a question to ask about this or that product, chit chat, etc!
Most of the people on apps are broken beyond repair. Liars, cheaters, addicts, phonies and crazies. The good people are not on there.
Not everyone Mr. Charge. I’m on there. Check me out on Grindr. :)
I’ve never had a social media account anywhere in part for the same reasons you revile dating apps, but I did partake of a one for a few months about ten years ago. Before any of the swiping left/right jazz which is just gross. Never-mind romance, I met a lot of damn’d interesting women. Sure, I wish I’d been able to encounter them each organically by just moseying through life, but alas, traveling for work and being a shut-in, that just wasn’t going to happen.
I think these applications have real value other than as lonely hearts clubs. And anything cool can be abused and get ugly — Polaroids jump to mind.
Interesting take on dating apps from the YouTuber “Hoe Math.” Highlights the perverse incentives for the app to make sure their subscribers never really meet anyone. The apps work in a similar manner as Scientology.
You’ve never used dating apps, but you’re some how certain what it perpetuates.
Probably your siblings and in-laws would be unhappy if they found out you think they have “vapid personalities” and their marriages are merely “hooking up”.
1:04 PM 8/8/2024
Dow 39,446.49 683.04 1.76%
S&P 500 5,319.31 119.81 2.30%
Nasdaq 16,660.02 464.22 2.87%
VIX 24.15 -3.70 -13.29%
Gold 2,463.10 30.70 1.26%
Oil 76.09 0.86 1.14%
Thanks SoCalBeach Bot!
😆
Like many other things nasty in the financialized world, what Blackstone did was legal. But it shouldn’t be, along with all the other nasty things that continue to destroy regular investors and actually everyone but the top 10%. I’d make a list, but it’s so long my post would get nuked.
What is the saying?
“The scandal isn’t what’s illegal, the scandal is what’s legal”
Everyone knows how PE firms operate. And all of Blackstone’s actions were disclosed. You can’t make laws to protect people from their negligence. Below are simple rules to invest by: a) don’t buy if the PE firm is selling, b) run from any investment that touts its DEI or ESG policies.
And don’t forget to run the other way when they use the term ‘stakeholder’.
…and, I would add, if THEY can’t/won’t be drafted, think very, very hard about soldiering for them…
may we all find a better day.
So, since the Greater Sell-session has now passed: Time to buy?
With a chart like that, of course… we KNOW:
It can only go up?!?
/s
Of course we know the house always wins. Just another example of 2nd-3rd order money “creation” and subsequent “destruction.” The cash is still in the accounts of a Russian Billionaire and a shadowy (but certainly altruistic) PE firm.
The house used to have the welcoming lights and accompanying show, but now it’s the BOH. What you see on this side of the curtain is exactly what they want you to.
The mighty “powers that be” from politicians to regulators are in nearly as much dark as those who bought the $84 shares.
How else could the SEC entertain the notion that “BTC is a commodity”?!?
I’m impressed that Bumble actually turns a profit. Seems like most of the Imploded Stocks were specifically designed to incinerate cash while never turning cash flow positive.
I am impressed by your handle.
We need more Bum Phillips in the world. He is sorely missed. His wit, honesty and intelligence was special.
Thanks for reminding me of him today.
My favorite line of Bum’s, when he took over the Saints: They ain’t ain’ts no more, they Bum’s now.
Bum’s most accurate line: “there are two types of coaches; them’s that’s been fired and them that’s gonna be fired.”
sorely missed for sure. Luv ya Blue!
No, I disagree with the premise. I don’t blame Blackstone. Why not? Somebody was going to bring this public, why not them? And the usual somebodies were going to pile in hoping to make a bundle. So why not the punters who swarm these things in hopes of striking it rich on the next big thing? After all, this is the way it works in the Wall Street Casino, right? That, and nobody partaking is a stranger to the risk so I’m sorry, but I don’t see Blackstone as the bad guys. Especially when the crew at Bumble had a chance and couldn’t execute on their vision. If anyone is to blame, it’s them.
Spot on. If retail investors bought in they were purely speculating. Took the risk and lost. If they had performed even the most basic analysis, they would not have invested. This scenario has played out so many times recently, one had to know this would happen, so either they were gambling or stupid….
I’m reminded of the push from George W. to allow all 401K accounts to be self-managed, that is, put into brokerage accounts for more active trading (rather than be in a limited number of funds). That was before the now common zero-commission trades. This was clearly a push from Wall St. to plunder the little people’s retirement accounts. Not a pleasant thought to have some sucker who has worked hard his entire life to be living in poverty in his later years. And that would be as sure a likelihood as the sun coming up in the morning.
This epitomizes the difference between the “let them do as these please” Libertarians and those who want some “regulations” to keep the ninnies from destroying their retirement accounts.
Where to draw the line? Let freedom ring, or keep the easily bamboozled from pissing away their savings and end up on the taxpayers’ dole when they’re indigent? I’m in favor of limiting the retirement accounts to funds that are considered better suited for longer term holds. Better than letting the knuckleheads chasing the IPOs and unicorns. They can gamble with their disposable income or use a HELOC and wind up on the street.
Sad predicament but there are those who are too f*ckin’ stupid and need an adult to put up guardrails, keeping them from running off a cliff or fouling their diapers.
” I’m in favor of limiting the retirement accounts to funds that are considered better suited for longer term holds. Better than letting the knuckleheads chasing the IPOs and unicorns. ”
I pressured my employer to offer me a self-directed 401k some time ago.
I wasn’t looking to ‘chase IPOs and unicorns’ but rather was just looking to buy T-bills and preserve my 401k’s value. In 2022, it was my *only* account that lost value because they only offer a bunch of equity index and bond funds. There was no way to buy risk-free investments like actual Treasuries with it.
I do agree with the principle of buying duration with one’s 401k – after all, I can’t touch that money for awhile anyways. I have a couple 10-year CDs and bonds in mine that I wouldn’t have been comfortable buying in my regular investment account.
“If retail investors bought in they were purely speculating. Took the risk and lost.”
I was young and dumb and bought BMBL shortly after the IPO.
I didn’t hang onto the shares for long but still lost money. I consider it the cost of a good education.
LMAO. Weren’t dating apps on the leading edge of the AI ‘revolution’ ?
Bumble will use AI “to help create more healthy and equitable” dating experience. “You could, in the near future, be talking to your AI dating concierge and you could share your insecurities … and then it could give you productive tips for communicating with other people,”
“I’m sorry Dave, I’m afraid I can only match you with cat ladies “. 😁
I wouldn’t do any business with Blackstone or businesses it promotes. But I might try a dating app if it was owned by Berkshire Hathaway and Warren Buffet recommended it. A date who owns some Berkshire Hathaway stock would be quite attractive. 😝
Those conflicts of interest are only deepening and growing more intimately devious and creepy. A psych evaluation app can spit out an assessment of your vulnerabilities in milliseconds. Tie it to other consumer data, and it is multiplied across realms of financial and other behavioral vulnerabilities. PE roll-ups of small businesses are nothing compared to the roll-ups to come, across all kinds of individuals and entities. Think I’m loopy? Just wait. No dating apps for me, no social media. And no associates who are dupes for that sort of thing.
I hear ya, phleep. But Wolf Street is pretty close to “social media”.
Wolf – Please do another YT audio! I want to hear you say mmmmONey!
Lol. He does say it like that.
Wolf has a German accent with a southern drawl. It’s the most unique thing I think I’ve ever heard.
Yes, but can he properly pronounce “squirrel”?
Wolf,
1) Thank you for a very useful timeline/tick-tock – it simply illustrates the techniques that PE firms use to incrementally lay off their (pretty big) up front risks.
2) These kind of PE deals are sort of the premier example of asymmetric share supply/demand in the market – on one side you have an essentially monolithic holder of shares (66% or so at the start, maybe?) and on the other side you have an (apparently) hugely decentralized army of buyers (how *they* get rounded up/suckered in is a story worth telling too).
Somewhat similar dynamics apply to insiders in the non-PE scenarios…although my guess is that even insiders typically only have say 25-35% share ownership at IPO (having had to sell off ownership to various VCs/other investors to get to the IPO stage).
3) The share seller/buyer asymmetry is important, because those monolithic holders create an artificial sense of share demand/stability/worth/market cap. But once they start liquidating to that army of thousands (?) of buyers, that stability/share demand cohesiveness is lost and (frequently) longer term demand goes into the toilet, and with it share price.
4) But this isn’t the first goat rodeo the markets have seen – so the real mystery is how armies of naive buyers keep getting assembled (who are these people rich enough to buy fairly sizeable slugs of shares…but stupid enough not to understand market history, PE seller incentives, or the consequences of PE sellers liquidating huge slugs of shares?)
Hell, even the lowliest retail investors are more and more catching on to the necessity of indexing – so who are these single digit millionaires taking down $100k-$250k slugs of shares being pushed out of the helicopter by PE sellers?
Who buys all this private equity ipo crap ? Are there really that many foolish retail investors ? Well, at least Blackstone gets to offset some of their covid commercial real estate losses by the cash earned from such pump & dump schemes.
I was young and dumb and bought some BMBL shares shortly after IPO.
Now I’m a little older and a little less dumb. I own some Blackstone corporate bonds that have been paying 7% and mature in a few months.
I bought Allbirds shares when they IPO’d. I was in the red a few days after and didn’t sell until my shares lost >50% from the purchase price. Like ShortTLT, I paid the price of an education that will stick with me for a lifetime. Would’ve preferred to learn the lesson from someone else, but no changing that now.
Learned while young. Learning more here on Wolfstreet.
Probably a bad comparison but I remember when Facebook went IPO and almost everyone laughed it off. If you win big on 1 out of 20 then a 10-100K risk might be worth it and you can offset losses with gains and other accounting maneuvers. That doesn’t explain Bumble necessarily but I can see people throwing their chips in on these hoping the wheel lands on double zero.
IKR, I won’t touch Meta outside of a mutual fund.
I know too many bad things about the culture.
I’ll buy every other Mega. No Meta!
What a heart warming story of how big bad Blackstone took advantage of all those rich dupes and relieved them of their extra millions. It makes you believe in love again!
Pretty much how it is for every ipo. Wall St & insiders get rich while retail investors are caught holding the bag.
It’s interesting how the ipo market is on ice this year despite the raging bull market. The size & frequency of new offerings is usually highly correlated with broader market performance.
Wolf all this debt in the manufacturing sector both US and Europe. Then add recent large increase in pay for lower productivity at plants and lower demand for product. Is recession needed?.
Well, to contradict Yukon Cornelius, a bumble DOESN’T bounce!! LOL
perfectly legal pump and dump. Did Blackstone promote these apps like an actor promotes their movies. I doubt it.
Like every IPO, there was a roadshow to promote the IPO to institutional investors. This was organized by the underwriters. Then Wall Street analysts and the media promoted the shares to retail investors. That’s always how it’s done, and its perfectly legal, which is why I called it in the article “an epic and perfectly legal pump-and-dump operation.”