Economic History · investing

Just Bumbling

Last month, the dating app Bumble debuted its IPO, which was meant to come in at a relatively impressive $43.00 per share. On the first day of public trading, the price skyrocketed by 70 percent, landing the girl power app at just under eighty dollars per share. The stock has since cooled off, but presently sits around sixty bucks, with a market cap of slightly below 7 billion dollars. So the swipers cheer.

Other (drowned out) voices are skeptical, perhaps because the stock movement leaves a very crucial question in limbo: What for? We get it, today’s market and drive for digital applications seems to know zero bounds. Anxious investors trade after whatever new flash has hit the water, and give hardly a second thought about it. Still, where is the argument in favor of Bumble emerging?

A cursory look at the company’s finances provide murky basis for this rise:

The company generated revenue of $416.6 million during the first nine months of 2020, up from $362.6 million during the comparable period a year earlier. Bumble also recorded a net loss of $118.5 million during the first nine months of 2020, versus net income of $54.0 million in the same period a year before.

Are those figures deserving of a share price far past many companies that have operated and delivered consistently for years? I understand something around $10.00 per share, but such grandeur seems almost entirely driven by religious belief. Bumble is after all a simple app that lets people date. It hardly has broken the standard in any regard, aside from letting women go first, resulting in most saying “Hey” rather than furthering the “meaningful conversation” they claim to desire.

Then we have the effectiveness issue. Countless men report (and are shown through social experiments) to be getting no results using Bumble or other dating apps. At best they are spending hours swiping on pretty pictures in a fruitless effort, or speaking with robot profiles which the company permits to enhance their numbers. Perhaps gay men are doing well, but otherwise the actual worthiness of the app is highly questionable.

And that may be precisely the wrong way to examine things. Maybe the focus on female empowerment is what makes Bumble a solid purchase. Men will continue to simp pointlessly, and females can count on the app to deliver a steady supply of eligible (attractive or rich) suitors. So instead of hindering their business model, the approach actually strengthens it.

What the hell. I’ll buy.

Federal Government · investing · Personal Finance

That Kind of Hertz

In an eleventh hour weekend move, the car rental company Hertz filed for bankruptcy, sending its shares for a lovely ride:

“Give you a lift?”

I’m curious what stands to follow, especially as many states continue their draconian frighten in place orders despite the economic bleeding. The travel industry and airlines might raise particular concern, but even some restaurants could hit the chopping block due to their brick and mortar ways. And that’s all excluding oil, which has a lot of livelihoods attached to it throughout various parts of the U.S.

If nothing else, this crisis should inform politicians of how fragile the financial web remains in our country. Sending over thirty million to the welfare rolls in order to save them from the invisible enemy strikes the mind as nanny state idiocracy, which we surely don’t have in America. After all, this is the greatest country on earth.

Right?

investing

Don’t Be The “I Should Have” Guy

Humans are not as adaptive as one might think. Right now, the economic herd is stampeding out of investments, many at a loss, because that’s what everyone else appears to be doing. Because Coronavirus is scary.

You can do the same (or not start investing to begin with), and the outcome will almost certainly be a loss, or missed opportunities.

Look at the market right now. We are on a roughly 11 percent decline in the S&P 500 since the end of February, with today’s 7 percent drop overall and the crush of oil bringing it home. At bare minimum, the market is much cheaper than it was a few weeks past.

If you break into individual  funds, the story is more stark. QQQ shares are down by $43.00 since February 19th, or 18 percent. SPLG is off about 7 bucks, or 17 percent.

What about loner stocks? Well, we have AMD down $15.00, or almost 26 percent. CCL, cursed by its exposure to virus-impacted cruises, lost 22 bucks, or 48 percent since February 19th.

And this is just a small sample size. Stocks are on sale. If you have free money, or a retirement plan through work, give strong consideration to buying in now, and certainly if there is a further decline. Drops of this nature don’t come frequently, but once they do, money will be made by the patient and unemotional .

Or, you could be the guy saying, “I should have invested back then.”