<aside>
☝️
Experimental Format. We might change the format over time based on best workflows for us.
</aside>
<aside>
⚜️
Decision
- First decision to reduce by 50% was taken. (9.2.2026)
- Second decision to close the position altogether was taken after more reflections.
</aside>
<aside>
💡
Briefing
After further reflections + studies new insights uncover that the investment thesis is more risky than previously assumed.
Therefore i am considering to reduce the position again even at current prices of $3.22 or similar.
Given the volatility of the stock this decision could have quite a large financial impact!
</aside>
<aside>
❓
Questions
</aside>
<aside>
💭
Aron
Arguments for reducing/against increasing the position
- Bumble’s revenue growth has been driven by Rest of the world, with core market (USA) declining. Hinge is now expanding to Rest of the world which limits further growth.
- Its adjusted EBITDA margin of 34% is same as that of Hinge despite Hinge being in early stages of growth, and lower than Tinder (40%) despite Tinder carrying lower ARPU ($17.6 verus $21). This may signal higher costs of running Bumble or attractive users. MM: I think the margin is way lower if normalized for ad-spend?
- Ai thesis uncertain. It could take a while before users start adopting AI Matchmakers, which is a problem for Bumble which is seeing strong decline in payers: Bumble Valuation Model (Google Sheets).
- Starting now over again - try to build new platform for new generation. (while legacy users are getting old) - constantly changing user groups!
- Hinge performed very well in Q4 2025. Their next network effects might become stronger and stronger as people rotate to it. ← Hinge is best product on market.
- Departure of Chief Product Officer at the end of 2025 may signal execution was slower: https://forum.investmentwiki.org/t/bumble-management/523/11?u=aron
- Decision to bring back back “women make the first move” in some regions may signal further strong payer decline and flop in strategy: https://forum.investmentwiki.org/t/bumble-product-developments/527/6?u=aron
- Bumble is less transparent than Match Group
- Upcoming AI match-making apps may be a threat to Bumble in the long-term, especially if its own AI match-making app is unsuccessful or is delayed: Ai match-making apps
- No structural moat, making the business highly risky given its current startup-like-phase: Bumble Products & Competition
- Wolfe Herd’s past achievement at Bumble may not be used to foretell her future achievement given changing secular trends. For instance, in the past Bumble benefited from the lack of women-centered dating apps but the current problem is mainly “swipe fatigue”, which every dating app is trying to fight. She may have also been lucky in the past.
- Execution is currently slower at Bumble than Match Group: Match Group said they are launching and experimenting on new products every two weeks but Bumble said it takes them months due to reliance on legacy infrastructure.
- Near-term product tailwind is unlikely: Until Bumble launches its AI-First and Cloud-Native (Bumble 2.0) in mid-2026, coming up with game-changing products will be hard since Bumble 1.0 is slow. The stand-alone AI app will also be relying on the core for user data. This gives competitors first-mover advantage. ← But there are some signs of improvment already
- Management comments on the Bumble 2.0
- There is a risk that the app may encounter outages once it transitions from the old cloud architecture (Date 1.0) to Bumble 2.0. Even outages of a few days may be bad for the share price: Management comments on the Bumble 2.0
- There could be rotation into Match Group shares given tailwinds from Hinge? Q4 2025 Match Group Earnings
- The drop in revenue that we are seeing could also be due to Covid tailwind wearing off, i.e. people going back to in-person dating. Covid tailwind may have also given Wolf Herd more praise than she deserves: Bumble Valuation Model (Google Sheets) ← But this could be positive as it explains why user numbers shrink
- Management commentaries on Covid (Notebook LLM)
- Regulatory headwinds such as those that keep coming up in California against “Women First Message” could reduce Bumble’s branding moat: Bumble legal disputes
- Economists are a bit cautious on Friday CPI report. If there will be large miss? stock could move down further.
- GPT: Do analysts expect the employment report and CPI released this week to come in line with estimates?
Arguments against reducing/for increasing the position
Conclusions
- The downside risks by far outweigh the upside, hence it doesn’t make sense to have it in our portfolio.
- I always felt that Bumble is a gamble but Moritz argument that it’s way cheap was quite convincing. Also, I had not taken into account the severity of their Date 1.0 infrastructure, user declines in the USA and the implications of Covid tailwinds on the business.
| Theme |
Rating out of 10 |
Weight out of 100 |
Confidence level |
| Bumble’s management |
5 |
90% |
65% |
| Bumble’s product |
4 |
80% |
80% |
| Bumble’s Valuation |
9 |
80% |
90% |
| Bumble’s moat/competitiveness |
6 |
60% |
75% |
| Bumble’s industry |
6 |
70% |
55% |
| Bumble’s regulatory |
7 |
45% |
65% |
</aside>
<aside>
💭
MM
Arguments for reducing/against increasing the position
- After studying operating costs in detail we found that it might be harder to cut costs than initially assumed. For example I didn’t expect m&a to be almost entirely advertising. A business requiring that much advertising and is still shrinking is quite worrisome esp. as competitor hinge is spending way less on advertising and is growing. See also: Income Statement - All Items analyzed in Detail
- The risk of bankruptcy (small) or financing at very bad terms is a bit higher than initially assumed esp. given the risk that adj. Ebitda will deteriorate further: Risk of Bankruptcy Analysis
- The revenue weakness in the U.S is worrying to me. It indicates that it’s shrinking strongly in its core market. Management is open about the app download weakness + top of funnel weakness with Gen Z.(users might be getting older and older) It also highlights that Hinge could take marketshare there: U.S revenue vs. rest of the world (note: management indicates that they acquired too many bad actors before with marketing. Not sure if credible. If yes some retraction even if the U.S seems okayish but decline might be too large for this). The fact that bumble is still growing internationally might mask key weaknesses.
- Execution risks remain large (e.g. core user trends, hinge competition, building Bumble 2.0, new leadership team, CEO was burned out before etc.) If there Is less cost cutting potential + even fiercer competition/shrinking in core market (U.S) the investment risks starts to look more incalculable and more like a gamble.
- ← Important: In general we actually want our investments to pass multiple filters at once to find something we have very high conviction on instead of gamble type situations. ‣
- If revenue deteriorates and costs cannot be cut, multiples can deteriorate very fast. The business could go fast from FCF of 250million to 100million to 50m or negative. Bringing multiples compared to an EV of 900m from 3.6 to 9 to 18 to loosing money.
- Network effects could start to work against Bumble if Hinge is growing and more users switch (esp. if they just use one app - not everyone will use multiple) ← business under strong attack. Weekly downloads declined (strongly according to sensortower)
- The value proposition of bumble is not strong enough vs. competitors esp. hinge. In general dating apps offer little room to differentiate and develop very strong USPs. (And therefore no one for the foreseeable future might have a lot more pricing power than competitors) Bumble Products & Competition
- While some users use multiple apps they might concentrate paying for the one which offers the highest roi and bumble might loose ground esp to hinge.
- Users don’t build dating profiles for the long run. (Like e.g. on Instagram, LinkedIn etc.) but are constantly shifting. Daters are also only on the market for a short period of time. This makes the business significantly less stable as priorities of every new generation is shifting and less moats or network effects can be build.
- Gen-Z which is more used to digital abundance rejecting dating apps might signal their believe that digital profiles cannot be trusted/are not good strategy to get to know people which is something even better ai matchmaking cannot fix
- Potential problems with ai matchmaking: profiles don’t have enough info, people don’t know who they are, what they want or cannot express it. ← True ai matchmaking might require different type of app with constant psychology designed quizes to capture key insights but even scientists don’t have all the answers why certain people match and others don’t. (Alternative: personality profile based on llm conversations) ← match group seemed less enthusiastic about ai in their Q4 2025 call than before. (Less mention of it) ← But see initial evidence that it’s working
- We might have been too optimistic in our projections for 2026 when it comes to user base and the bleeding might well continue (due to aging users, less Gen Z users, hinge etc.) (Note: Annecdotal evidence: Many profiles shown to me personally a slightly older than me)
- Implementations of Ai matchmaking might not resonate with consumers as it needs to collect a lot of data. Even if it does there is a possibility that a new competitor captures market share. It’s for from certain that incumbent companies can implement it well or implementation of bumble is not so good. ← Feeling a bit more optimitic about it
Arguments against reducing/for increasing position
See also: Bumble Thesis and previous decisions. - I will not import all old ones of them.
- The business is quite cheap given it trades at P/S and EV/S below 1 and is a dominant, network oriented, digital business which in theory should have high margins. (Note: But not if it’s not defensible and users are loyal/locked-in)
- Potential high profitability esp. if Ai suggestions are very good (but potential problems how good they can become?! - see argument above) Example where things are developing: ‣. They could sell those kind of things at a premium? (Match-based charging) - Currently testing standalone matchmaker. (Use learning from it to improve the core one + use data from core to improve the standalone matchmaker) ← dating suggestions are getting better
- CEO is very aware of major factors of good matchmaking like how well people know themselves, how well they design their profiles etc. and is focusing on it.
- Recent Payer loss mainly in rest of world and not USA according to them? (But U.S. revenue is down)
- Based on own experience I feel their matching gets better (based on texts, activities and dating preferences one selects) ← Gives unique, fast and good overview. ← best overview of compatibility (with interest section - makes it most clear)
- Bumble dynamics are a bit unique it forces you into writing in the beginning as you can loose the match again which can sometimes be positive and is some sort of differentiator - it also focuses one on less people
</aside>