Can you trade Tinder stock? The short answer is no. They’re a private company. But with the success of Bumble going public, a Tinder IPO could become increasingly attractive to their company. If you want to trade dating app stocks, you do have some options. Keep an eye on $MTCH and $BMBL.
2020 has been harsh on everyone. We’ve gone from strict lockdowns for the majority of the year to dealing with the pandemic. Along with toilet paper shortages and now changing weather patterns turning winter states warm. And throwing warm states under inches of snow.
It seems like this is the year when everybody is intent on kicking you when you are down. All difficulties can be faced however, if one has a friend, companion and partner in crime to deal with it.
That endeavor too hit a road block as lockdowns put an end to all dating activities. The biggest issue plaguing people across the world was not food or toilet paper but loneliness. As they grappled with it cut off from society, even those who weren’t inclined to date began feeling the need for one.
Restrictions have begun lifting and the recovery has begun.As a result, there’s going to be a boom in the dating industry as people begin to start their search for a relationship or for fun companionship. And one of the largest beneficiary of this is going to be the market leader of dating apps: Tinder and today we are going to find out about Tinder stock and whether a Tinder IPO is going to come out.
Match Group is listed on the stock markets. The recent IPO of Bumble which was a competitive dating app valued at $7 billion USD caused a surge in the share prices of Match Group as well. Each share is currently priced at $160.95 at the time of writing valuing the company strongly at $42.45 billion USD.
That would do well for Tinder stock. However, we’re still waiting for a Tinder IPO. Will we see one soon? We’re not sure but you can bet all dating apps have their eye on Bumble. And we could see an influx of dating app IPOs because of that.
Consumers’ dating preferences vary significantly across geographies influenced by the religious and cultural factors, demographic norms and even intent (casual vs serious relationships).
However, unlike the one ring to rule them all, there has been no single app that’s managed to cater to all of these preferences together. Thus, each preference has had its own app with its own set of features. A company looking to capture the dating market will do well to own a bouquet of apps.
As a result, that’s what Match Group does. Match consists of a brand portfolio of 45 apps that aim to cover the maximum amount of preferences across the globe. Check out some key statistics in the photo to the left.
Tinder is the flagship app of the group and one of the most recognized brands around the world. It’s also the highest-grossing app around the world. Now that’s and achievement and goes to show that people are willing to drop some serious money when it comes to dating.
The same is reflected in the company’s revenues; which continue to go up with no signs of exhaustion. Even during the pandemic when everything in the world slowed down, Tinder revenues grew by 17% over last year. So if there was Tinder stock, they’d be sitting pretty.
Margins have been a hit and miss with MTCH stock. However, the same is attributed to losses from discontinuing operations as compared to business functions. Over the last few years, Match Group has decided to shift its focus solely on dating and have begun stopping or selling of brands and businesses that relate to its non-dating businesses.
For example, in 2017 they sold off Princeton review which was an education technology company, and recognized a loss on the same (Source: 2019 Annual Report). These losses have suppressed the margins. Once the cleanup is out of the way, the company’s margins are expected to recover once again.
So strong has been the focus of Match.Com to capture the world dating market that they have nearly monopolized the US markets with them owning all the apps operating there except for Bumble. The company which started as one lonely Stanford Business School graduate’s attempt to build a less embarrassing way to find love online in the 90s has grown from strength to strength to become a titan today.
Tinder stock price has grown from strength to strength. A Tinder IPO came about in 2015 at $12 per share where it opened at $13.5 per share on the listing, up 12.5% from its IPO price.
While the initial response was tepid and in line with the small margins, the company has seen an explosion in both the margins as well as stock price with an astounding 64% CAGR over 5 years. $10,000 investment in the IPO at $12 per share in 2015 would be worth $134,125 in 2020. That is a 13x return.
Tinder’s biggest strength and one which contributed to the massive growth in user base revenue was the gamification of the dating experience. Gamification may be well known now but when it was introduced by Tinder in their app in 2012, its potential for fueling growth was underestimated across the industry.
By the time Tinder came into existence in 2012, desktop-based and chat-oriented dating apps like OkCupid, Match.com, and eHarmony were already in existence. And they had a large user base.
When it comes to dating apps, the larger the user base, the bigger the chance of a match. Thus creating a self-fulfilling positive cycle. Tinder disrupted the whole model by introducing variable rewards and swipe functionality.
Dopamine is released every time we indulge in any pleasurable activity. Like eating your favorite food or listening to your favorite movie or even achieving sometime or winning something. That’s why people play slots. We know most people lose at it. But the dopamine hit that ensues following a small victory and the chase for that dopamine causes people to continue putting coins in the machines.
There’s an anticipation of another victory and consequently, another dopamine hit. Dopamine is also released while playing games where you accomplish something. And when you have a big win trading something like Tinder stock.
That’s why, some of the most engaging and addictive games out there like Candy Crush offer small bit sized levels or missions; which once completed gives a small dopamine boost to the brain. And has you playing and even dropping money for more opportunities.
That’s what makes gamification so successful as well as dangerous. Tinder introduced the swiping feature which allows one to communicate only when both swipe right on each other. Once two people swipe right on each other, it’ll announce a match on both their phones via notifications.
A successful match creates an instant dopamine rush. Once the initial chat is over, one begins looking again. As they say, the fun is in the chase and Tinder allows you to undertake that chase on steroids. Tinder then pivoted its revenue model to make money on the swipes.
Users are provided a limited number of swipes. They then have a cool-down period during which they cannot swipe unless they pay for various account types. Which allows for higher swipes or even unlimited swipes. People addicted to the chase have no option but to pay the money.
Especially if they wanted to continue using it as per their need. This simple yet revolutionary method catapulted Tinder, an app rated consistently for poor technology into the top of the industry. Simply because it was fun. While everybody is trying to emulate it now, its leadership position stands cemented.
If we ever see a Tinder IPO, that could have a huge impact on Tinder stock. We’ll have to keep waiting for now though.
Tinder’s issues stem from two parts. Its user experience as well as legal issues and business monopoly issues. User experience began to sour once bots were introduced in the mix.
To encourage unsuccessful users back to their platform, Tinder would send bots to match and chat with them.
A user who has not had much luck and stopped using the app would be enticed to come back. And maybe even drop money on the app to be able to talk to that match.
Such has been the proliferation of bots that a quick search on Google gives you hundreds of thousands of results on how to spot a tinder bot, signs that your Tinder match is a bot etc.
It’s become a whole meme culture now and people are constantly posting screenshots of bot chats. Which could affect a Tinder IPO.
The next set of issues focus on the legal aspects faced by Tinder Users. We have scam bots who try to scam people into giving them cryptocurrency. There are of course fake profiles and people hide their photos and identities all the time.
This often leads to unfortunate scenarios where people are catfished. This can be a danger for women who are exposed to predators.Tinder has taken strides to protect its users but the threat nonetheless remains.
For men, the issue isn’t fake profiles but those that indulge in prostitution. Tinder has a strict policy against solicitation and it reviews and bans accounts reported for solicitation on a frequent basis. However, such accounts pop up frequenty.
Some are upfront about it. Others don’t reveal it until they meet on a date and it really ruins the user experience; not to mention that it puts men in a bad position in some countries where prostitution is illegal.
This leads to extortion as well as the men who are put into precarious positions have no option but to pay up if they want to avoid criminal charges that are threatened.
On the business side, the strong monopoly formed by the Match Group exposes it to potential antitrust lawsuits. While there’s been no such lawsuit yet, the threat remains and may impact the future of the company. Its only competition is Bumble so far. Match Group tried to acquire it but Bumble refused.
Then was engaged in litigation which got resolved some time ago. However, Bumble works on a different business style where women hold all the power. Their niches are distinct enough for Tinder to continue holding a dominant position in the market.
The pandemic may not yet be over, but individual patience sure is. A year of forced solitude has forced even the highly introverted to go out & socialize and find a companion for themselves. Tinder has demonstrated with its revenue growth that it rules the dating market.
And people haven’t let the pandemic stop them from finding love. Once the world opens up and the situations normalize, the boom in its user base will be nothing short of phenomenal and that is what makes Tinder stock worth investing in.