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Stellar Performance Of Dating App Bumble In Debut On Nasdaq


02/13/2021


Stellar Performance Of Dating App Bumble In Debut On Nasdaq
A 76 per cent surge in the value of its stocks on debut of the dating app Bumble in new York saw the valuation of the company soar to $14bn.
 
The shares of the company opened on Nasdaq at $76 which was much higher than the offer price of the stocks at $43 in the initial public offering.
 
Supported by the private equity firm Blackstone, the first day performance of Bumble now equals that of some of the other tech debuts such as Snowflake, Airbnb and DoorDash all of which has very strong first day performance at the stock exchange last year.
 
Whitney Wolfe Herd, a cofounder of the rival app Tinder, which she left earlier in 2014, was also the founder of the Bumble. Founded in 2014, the firm is based in Austin, Texas.
 
Tinder was sued by Wolfe Herd over allegations that she was subjected to sexual harassment by the other cofounders. The dispute was settled for $1m by Match Group, the parent company of Tinder even though it denied all the allegations.
 
In 2018, a $450m acquisition offer from Match was rejected by Bumble which was followed by a court battle between the companies in 2018. The court case was filed by Match had filed against Bumble over allegations that the later firm had infringed its intellectual property.
 
But just two weeks later, a counter suit was filed against Match by Bumble in which the later was company accused of fraud and theft of trade secrets. However in the same year, both the lawsuits were dropped.
 
A majority stake in the company MagicLab, which owned the Bumble and Badoo apps at the time, was taken in 2019 by Blackstone from the founder of MagicLab, Andrey Andreev. Following that deal, Wolfe Herd was appointed as Bumble’s chief executive officer. 
 
According to analysts, it is likely that there would be some venture capitalists, including Benchmark’s Bill Gurley, who would rise up in criticism of the very good first day performance and gains made by companies such as in the case of Bumble. On previous occasions Bill Gurley has alleged that under-pricing of stocks are often done by investment banks for initial public offerings so that their inve4stor clients can make big gains when such stellar first day trading happens.
 
Companies have even been pushed to opt for direct listing by some investors in which there is little influence of bankers on the pricing of the stocks to be offered on debut of companies
 
(Source:www.theguardian.com)