Get Real Time Here
| Open10.180 | Close10.180 |
| Vol / Avg.2.041M / 2.972M | Mkt Cap1.321B |
| Day Range10.070 - 10.300 | 52 Wk Range9.940 - 21.055 |
On paper, the novel coronavirus pandemic is a net negative for multiple industries. However, 1 sector truly distinguishes itself as both a viable disrupter of traditional practices and a beneficiary of an otherwise cataclysmic event: online dating. That’s what makes the initial public offering (IPO) of dating app Bumble Inc (NASDAQ: BMBL) was so intriguing for forward-thinking investors.
As the pandemic prioritized businesses that can conduct affairs without person-to-person contact, online dating has suddenly taken on additional pertinence. Frankly, it's the safest way to meet someone new. Bumble offers a unique take on this burgeoning market, bolstering the appeal for BMBL stock.
BMBL stock embodies a significant victory for women entrepreneurs like Whitney Wolfe Herd. While much work needs to be done, Bumble itself is a benchmark for diversity among online dating services, with women comprising 54% of the management team and 73% of the board.
How to Buy BMBL Stock Summary:
- Pick a brokerage.
- Decide how many shares you want.
- Choose your order type.
- Execute your trade.
How to Buy Bumble Stock (BMBL)
As a prospective buyer of Bumble stock, note that the company is about to launch its market debut. Typically, IPOs carry a higher risk profile than securities that have been trading for some time. There’s a wide range of private companies that would never even choose to go public because they have riskier business models. At the same time, Bumble app revenue looks to be fairly sturdy because of the demand for this app from women (who represent a higher percentage of the population.)
This is largely due to the fact that a security with a track record has an established history that you can see in its price chart. Therefore, it’s easier for you to extract where the bulls and bears have a strong presence. But with IPOs like BMBL stock, you just don’t know until you know.
Also, an IPO play could jump substantially higher than its offer price. While it’s possible for average everyday retail investors to buy shares at the offer price, such a benefit is usually reserved for higher-profile investors.
Still, this does not mean you should necessarily avoid BMBL stock. Currently, the IPO market is on a hot streak and Bumble may rumble to soaring heights based on the underlying relevant business model.
- Pick a brokerage.
Before we can discuss how to buy stocks, you must first pick a brokerage. Because individual needs vary, finding the best brokers involves more than simply selecting a cheap platform. Indeed, rising competition has standardized certain incentivizes, such as commission-free trading.
To find what works for you, prioritize what attributes you would like and utilize frequently. For instance, if you’re new to investing, you may wish to find a platform that offers ample educational material. Or if you anticipate that you’ll trade for a living, an online broker that specializes in full-spectrum services may be your best fit. - Decide how many shares you want.
Unlike other financial transactions, the stock market conducts trades on a share-count basis, not by dollar amount. However, the conversion from dollars to shares is easy. Simply take the amount you wish to invest and divide that by the market price of your desired stock.
Now, BMBL stock is a tricky case because it’s an IPO. Bumble has priced its shares at $43, which is above the prior estimated range between $37 to $39. Of course, during the regular session, BMBL could go anywhere.
Assuming a $43 price tag, if you wish to purchase $1,000 of BMBL stock, you will be able to acquire 23 whole shares ($1,000 / $43 = 23.26). Though some brokers offer the ability to purchase fractional shares, this is not a standard feature. - Choose your order type.
Because the market price of an equity almost always fluctuates during trading session hours, you can’t just place a buy order. You must specify what type of transaction you wish to execute. Learn the various order types available and common terminology:
Bid: A bid represents the maximum price a buyer is willing to pay for a stock. This is always lower than the ask.
Ask: In contrast, the ask is the minimum price that a seller will accept. The ask will always be lower than the bid.
Spread: The spread is the difference between the bid and ask price. Conceptually, investors make money through speculation that their acquired stock will rise in value. Market makers earn their living profiting from the spread (their acquisition price versus their selling price to the investor).
Limit order: Limit orders are buy/sell orders that execute at exactly the price you specify. Limit orders offer the most transparency because you know the terms of the transaction beforehand. However, the stock is not guaranteed to reach this specified price.
Market order: Market orders execute at the next available price. If you request such an order during normal session hours, it’s virtually guaranteed to execute. However, the drawback is that the terms of the transaction are least favorable to you (buying on the ask, selling on the bid).
Stop-loss order: Because most non-trading professionals cannot stand watch over their portfolios all the time, stop-loss orders offer a safety net in case of extreme volatility. They trigger when a specified price has been met and will trigger at the next available price. This is advantageous if market volatility occurs. However, if a stock opens a new session at a far lower price than the specified price, a stop-loss order will execute regardless.
Stop-limit order: A stop-limit order is similar to a stop-loss order with 1 critical exception: stop limits only execute at specific prices, eliminating the concerns associated when a stock opens a fresh session at an extremely low price. Therefore, stop-limit orders can potentially advantage reactionary price spikes following a volatile event, known colloquially as a dead-cat bounce. However, there’s no guarantee that the target stock will reach your stop-limit order price. - Execute your trade.
Because of the uncertainty of IPO plays, BMBL stock presents a unique challenge. If you believe in the underlying fundamentals and want a position no matter what, you should consider a market order. This way, you have assurances that you will own Bumble shares.
On the other end, if you wish to carefully control your entry points, the limit order is the way to go.
Best Online Stock Brokers
BMBL Stock History
Because Bumble is just launching its IPO, no price history exists. However, that doesn’t mean you can’t reasonably forecast the risk-reward profile of BMBL stock.
As previously mentioned, dating apps have been very popular during the COVID-19 lockdowns and will likely remain a key component of the singles’ social life moving forward. This is reflected in the market performances of publicly traded companies tied to the dating game. For instance, Match Group (NASDAQ: MTCH) is up 140.5% since the beginning of January 2020, while Spark Networks (NYSEAMERICAN: LOV) is up 78.4% over the same timeframe.
Pros to Buying BMBL Stock
- Supreme relevance: Although the pandemic has been the most disruptive event in modern U.S. history, certain human inclinations will never fade away. Bumble facilitates the desire for connection but does so in a safe, contactless manner.
- Focus on ESG: Over the last few years, investors don’t just focus on profitability but rather on environmental, social and governance (ESG) concerns. With Bumble’s corporate ethos of equality and diversity, BMBL stock offers a holistic narrative for modern market participants.
- Distinct take: By elevating women to equal status in the relationship dynamic, Bumble immediately distinguishes itself from rival online dating platforms, where the competition is thick.
Cons to Buying BMBL Stock
BMBL stock doesn't guarantee total success. As an example, Chinese dating platform Momo (NASDAQ: MOMO) is down nearly 44% since January of last year.
- Risky tendencies: While public debuts offer tremendous opportunity, the opposite is also true. No matter how compelling an IPO is, you should never put down more money than you can comfortably afford to lose.
- Competitive threats: Dating apps may feature proprietary technologies to make their platforms stand out. However, there’s nothing patentable about the act of dating, which opens BMBL stock to substantial competition.
- Novel approach is questionable: Though women users as the driving force behind Bumble is unique, that doesn’t necessarily guarantee success. Pigeonholing users into one behavior may not turn out to be the best move.
A Compelling Public Debut
Online dating has been on the rise since it facilitates a place where authentic relationships can bud and thrive. With the pandemic, this narrative has only soared in significance as people still want to meet others — it’s just that they want to do so safely and responsibly.
Bumble allows them to do exactly that but goes beyond the rest of the crowd. By encouraging women to be the initiators, the company sets a new framework in the dating arena, both the opportunity and the risk behind the BMBL stock IPO.
About Joshua Enomoto
His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.