What Happened?
Shares of online dating app Bumble (NASDAQ: BMBL) jumped 17.2% in the morning session after the company announced a major restructuring plan that includes laying off approximately 30% of its global workforce and raising its financial outlook for the second quarter.
The dating app company stated the move, which will affect about 240 employees, is part of an effort to realign its structure and focus on strategic priorities. Investors reacted positively to the significant cost-saving measures, which are expected to result in up to $40 million in annual savings. In conjunction with the layoffs, Bumble boosted its second-quarter forecast.
The company now expects revenue between $244 million and $249 million, up from a prior range of $235 million to $243 million. Adjusted EBITDA is also projected to be higher, now anticipated between $88 million and $93 million. This combination of aggressive cost-cutting and improved guidance signals to investors a renewed focus on profitability and operational efficiency.
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What The Market Is Telling Us
Bumble’s shares are extremely volatile and have had 30 moves greater than 5% over the last year. But moves this big are rare even for Bumble and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 22 days ago when the stock dropped 5.2% on the news that JP Morgan downgraded the stock from Neutral to Sell and assigned a $5 price target, implying a potential 10% downside. The downgrade was attributed to challenges in the dating app market, particularly concerning "Gen Z product and market fit issues." The firm also raised concerns about competition from Hinge.
Bumble is down 23.6% since the beginning of the year, and at $6.09 per share, it is trading 42.1% below its 52-week high of $10.51 from June 2024. Investors who bought $1,000 worth of Bumble’s shares at the IPO in February 2021 would now be looking at an investment worth $86.62.
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