Bumble Soared 42%,Another Short Squeeze?

After social software $Bumble Inc.(BMBL)$ releasing Q4 financial report, it jumped by 42% in the day, which is suspected of setting off a wave of short squeeze.

In the past, Bumble has been sold off sharply, falling by more than 65% in six months, which is seriously inconsistent with its fundamentals, because the utilization rate of dating software in the United States is significantly higher than that before the epidemic.

According to Sensor Tower, global usage of Tinder, Bumble and Hinge increased by 17% in January 2022 compared with 2019.

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BumbleQ4 results are as follows:

In 2021, the total revenue increased to 765.7 million US dollars;

Bumble App revenue increased 42% to $150.5 million in the fourth quarter;

In the fourth quarter, paying users of Bumble App increased by 29% to 1.6 million, an increase of 108,000 from the previous quarter

From the financial report, all the data are still good, the revenue and the number of paying users have increased steadily, and they are close to breaking even under GAAP.

The catalyst for the stock price surge mainly comes from the management's description. The first is the announcement that Bumble will stop its business in Russia and delete all apps from Apple App Store and Google Play Store in Russia and Belarus. This is another technology company to announce its withdrawal from the Russian market after AWS, Microsoft, Samsung, Spotify and WeWork.

And more importantly, Bumble's withdrawal from Russia has had little impact on it.

Q4 financial report shows that in 2021, the total revenue from Russia, Ukraine and Belarus only accounted for 2.8% of the company's total revenue, almost all of which came from its Badoo App and other revenues; Russia, Belarus and Ukraine account for less than 0.1% of Bumble App's revenue.

The estimated loss of revenue from the suspension of Russian operations is only $2 million, which is much less than the market expected.Compared with the support for the company to withdraw from Russia, this financial loss is dwarfed.

Spillover effects of Russia-Ukraine war are still frequently staged in financial markets,and crazy investors may look for more small-cap stocks to short squeeze, especially companies with Russian business.

According to a recent Morning Consult survey, three-quarters of Americans support American companies cutting off business ties with Russia, which undoubtedly increases the chances of taking advantage of emotional emptying.