Bumble is an operator of two online dating platforms: (i) the Bumble app; and (ii) the Badoo app. In February 2021, controlling shareholder defendant Blackstone took Bumble public through an initial public offering in which Bumble raised more than $2.4 billion from investors in gross offering proceedings (the IPO). Following its IPO, Bumble claimed that it was experiencing significant growth in its paying user count. The Bumble class action lawsuit alleges, unbeknownst to investors, during the third quarter of 2021 (3Q21), ending September 30, 2021, Bumbles previous favorable paying user growth trend had abruptly reversed. Despite these adverse facts, on or about September 10, 2021, just days before the end of its 3Q21, Bumble undertook another registered public stock offering without disclosing the problems plaguing its dating apps or the abrupt slowdown in Bumbles paying user growth allowing Blackstone to sell 20.7 million shares of Bumble Class A common stock at $54 per share, generating more than $1.1 billion in gross proceeds. Specifically, the Bumble class action lawsuit alleges that the SPOs registration statement contained inaccurate statements of material fact because they failed to disclose that: (i) Bumbles paying user growth trends had abruptly reversed in 3Q21 and Bumble had actually lost tens of thousands of paying users during the quarter; (ii) paying users had been more reluctant to sign up for the Bumble app during 3Q21 because of the recent price hike for paid services on the app; (iii) a material number of paying users were leaving the Badoo app and/or could not make payments through the Badoo app due, in substantial part, to problems arising from Bumbles transition of its payment platform; and (iv) as a result, Bumbles business metrics and financial prospects were not as strong as the registration statement had represented. On November 10, 2021, Bumble announced its 3Q21 financial results, disclosing that, rather than growing paying users, Bumbles total paying user count had actually declined to 2.86 million, well below Bumbles 2.9 million reported paying users as of June 30, 2021 as highlighted in the registration statement. Subsequent to the SPO, the price of Bumble Class A common stock declined substantially. By January 24, 2022, Bumble Class A common stock traded below $27 per share, a decline of more than 50% from the SPO price.
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