Investing.com -- Randian Capital recently released a “turnaround plan” for dating app company Bumble Inc (NASDAQ:BMBL), advocating for a drastic change in the company’s direction, including a potential sale. The firm, which has followed Bumble since its IPO four years ago, told Investing.com in exclusive comments: “The current trajectory is not working.”

Over the past six months, Randian conducted a deep dive into the company’s performance, focusing on the significant drop in its stock price. Since its IPO in February 2021, Bumble shares have plummeted from $76.00 to $4.01.

Despite this decline, Randian contends that “market sentiment is unnecessarily negative,” citing the company’s stable revenue and EBITDA resilience as signs of underlying strength.

While the firm declined to disclose the size of its stake in Bumble, it did acknowledge that a “meaningful portion” of its portfolio is invested in the company. As a private investor not regulated by the SEC, Randian also opted not to reveal its assets under management (AUM).

The firm welcomed the return of Bumble founder and former CEO Whitney Wolfe Heard to her leadership role but emphasized the need to modernize the company’s executive team. Randian urged Bumble to recruit younger talent with a stronger grasp of Gen Z preferences. It also recommended that the company initiate a strategic review and accelerate its stock buyback program, citing the current share price as a compelling value opportunity.

According to Randian, former online dating executives have confirmed that Bumble can operate at a significantly lower cost. The firm believes that to maximize shareholder value, Bumble must adopt more aggressive cost-cutting measures.

Randian further argues that Bumble’s free cash flow is severely undervalued and that the company holds strong potential for mergers or acquisitions. It suggested that Bumble could be a leveraged buyout target or a strategic target for a more prominent tech player.

When asked which companies might be interested, Randian pointed to private equity firms, AI labs, and, most notably, Meta Platforms Inc (NASDAQ:META). The firm believes that acquiring Bumble would be a logical move for Meta, which has recently attempted to grow its own dating service.

A potential acquisition would allow Meta to integrate Bumble with its existing Facebook Dating platform, while also leveraging Bumble’s 4 million paying users to deepen its reach into the Gen Z demographic.

However, Randian acknowledged that Meta could face regulatory challenges. The company continues to battle antitrust scrutiny stemming from its acquisitions of Instagram and WhatsApp.

Additionally, AI labs such as OpenAI, Anthropic, and X Corp may also be potential acquirers. Randian believes these firms could find value in Bumble’s unique user data as a source for AI training.

Randian Capital’s proposal places Bumble at a pivotal crossroads. With shares at historic lows but supported by resilient fundamentals and untapped strategic value, the company is under pressure to act decisively.

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