Bumble or Match Group?
Bumble’s initial public offering on Thursday could spark some debate among investors as the top rival to Match Group’s Tinder dating site begins trading.
Boasting year-over-year user growth of nearly 19% as of September, Bumble will target a $28 to $30 per share price on a $7 billion valuation. Match Group’s valuation is more than $45 billion, but its average subscribers grew by just 12% over that time frame.
Bumble is composed of its namesake app, known for a female-first feature that allows women to make the first move, and Badoo, a separate dating app popular in Europe, Africa and other regions. The company is hoping to raise as much as $1.8 billion in Thursday’s debut.
Joule Financial Chief Investment Officer Quint Tatro recommended staying away from both hyped-up names.
“I can’t buy either of these companies,” he told CNBC’s “Trading Nation” on Wednesday. “In my opinion, these are overvalued.”
Match Group’s stock soared to an all-time high on Wednesday after the company announced a deal to buy Hyperconnect, a South Korean mobile app operator. Shares finished trading up nearly 8%.
“There was a time when a company would announce an acquisition spending $1.7 billion and the actual company would get hit because of that lost cash,” Tatro said. “It’s a speculative kind of frenzy. We’ll have to see what this acquisition yields. But again, … I think if you chase these names here, it’s very, very dangerous. I would stay away from the Bumble IPO and I would definitely not chase Match.”
Though Match Group shares are expensive, “the chart looks great,” said TradingAnalysis.com founder Todd Gordon, who holds Match Group stock.
“It’s testing upper channel resistance,” he said in the “Trading Nation” interview, adding that the Hyperconnect acquisition would accelerate Match Group’s market share growth in Asia.
“This video world that we live in has changed societal norms. [Dating apps] are how young people are meeting,” Gordon said. “We’re busy. We’re not out going to bars and restaurants as much anymore. This is the way of the future, whether you like it or not. So, I hold it. I like it. I’m aware of the overhead resistance.”
Disclosure: Gordon owns shares of Match Group.