Bumble is being bought for $6.05 a share in cash, a 138% premium; as a shareholder the speaker will accept it and will likely exit, since at about $5.95 only roughly 10 cents of upside is left, against a fall back to about $2 if the deal fails, and he does not expect a higher bid.

Bumble's stock has risen by approximately 135% in just the last two days. In fact, this is not the result I expected as a shareholder in " Bumble". It has now become an unexpected win in the Asymmetric portfolio,

but I will accept this acquisition because the business has not gone in the direction I thought when I started buying the shares. Sometimes your hypothesis doesn't go exactly as planned, but when you buy companies that generate positive free cash flow and trade at a very good valuation, one of the great advantages is the possibility that someone else could take over the company and change its course.

So, this has now become a profitable position for me, but I want to review exactly what we have learned about this acquisition, and why the stock is exploding so much .

It is not common to see acquisitions with this much price premium, but sometimes it makes sense for all parties involved. If you want more from me, including all my stock purchases, such as Bumble stock, follow Asymmetric Investing.

This is what I will be using throughout this video, including this graph which shows how things exploded at around 2:00 PM yesterday. Now, it has risen by about 135% in that time period .

This contains all the information you need about "Bumble".

The company's value-to- sales ratio is only 1.1. This ratio was around 0.5 before the takeover rumors began to spread. The price- to-free-cash-flow ratio on a forward basis is only about five.

Therefore, this rating has become very attractive.

This is one aspect that investors who buy the company look at, but let's delve deeper into all of this.

Let's start with the official news that was released before the market opened today. Bumble has agreed to an acquisition under which shareholders will receive $6.05 per share in cash, representing a 138% premium over the share price before this news broke. The board of directors has approved this.

Whitney Wolfe Heard, who has a complicated history with the company, is currently the CEO, but previously stepped down. There are also debts associated with its stake in the company, but it did not participate in the vote to actually approve this deal, but the subsidiaries of Blackstone and Herd also approved the deal.

The other interesting part is that she will actually be forced out of her position.

Ithika, the company that is buying the firm, will have co-executive directors, Ruby Gupta and John Hagman, and this is primarily an opportunistic acquisition of this company.

Let's look at some numbers here and explain exactly what was happening with Bumble. Many things don't go right with the company. I started acquiring shares about a year or so ago .

So, let's take a look at the total revenue. You can see that it is in decline. Operating profit has improved slightly, and let's take a look at free cash flow, because that's the other part when looking at a company like this.

They have actually achieved a very positive free cash flow.

So, let's focus on this aspect here. We can see that revenues have actually been declining since the end of 2024. At the same time, free cash flow has been improving.

So, the strategy that Heard brought when she became CEO again at the company was, you know, we don't want to focus on serving each customer individually. We want to focus on the most serious client.

We are prepared to charge a higher price for that. Therefore, we will give up membership numbers in exchange for higher prices and higher profit margins as a result. And that's exactly what we see in the numbers.

This is one of the key performance indicators in financial artificial intelligence. The green color represents the number of users who pay on the Bumble app. You can see that this peaked near the end of 2024.

So, the number has now dropped to 2.1 million users, but the price they pay is on the rise. Therefore, it reached its lowest level at around $24.80. Now, that has risen to $27.60.

In this way, things are moving in the right direction somewhat, but the arrow was not clearly moving in the right direction. So, this is just a look at the year's performance so far.

You can see that the shares fell by about 30% before this takeover bid . If you go back 3 years, you will find that even after today’s move, the stocks have fallen by about 58%. 5 years.

You can go back a lot. It was not a good time for Bumble shareholders.

The transformation plan that management was planning to implement was much slower than expected . Now there is a lot of competition in this field as well. Therefore, sometimes the best option is to take the company private and make sweeping changes.

They may run the company a little differently, but they are clearly willing to pay a premium over what the market was willing to pay.

I think Heard had a significant influence on the final price. For this reason, the premium is much higher than the stock's trading price . For asymmetric investors , this is a stock I would hold in an asymmetric portfolio.

This is now generating a small profit here. A profit ranging from 30 to 40 percent in the end. I will most likely transfer this to better opportunities. It's not worth the risk of actually doing this.

This is what investors need to think about now. You can sell the shares for about $5.95. It will give up about 10 cents in this potential takeover bid . The risk you take here is that if the acquisition fails, you will likely return to that lower price, $2 per share.

As an investor, I'm likely to get rid of this risk. You are also giving up the possibility of making another takeover bid at a higher price. I don't necessarily think that will be the case.

It is likely that not much consolidation will occur in this area.

But for investors who had held Bumble shares for a few days or even as late as 1:55 yesterday, this was an amazing performance over the past 24 hours or so. This is certainly not what I expected from the stock, but I will accept it as a shareholder .

Tell me your opinion about the " Bumble" acquisition.