Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 1 of 34
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`IN RE BUMBLE, INC.
`SECURITIES LITIGATION
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` Case No. 1:22-cv-00624-DLC
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` CLASS ACTION
`
` Judge Denise L. Cote
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`
`
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`MEMORANDUM OF LAW IN SUPPORT OF
`DEFENDANTS’ MOTION TO DISMISS
`PLAINTIFF’S CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 2 of 34
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`TABLE OF CONTENTS
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`Page
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`PRELIMINARY STATEMENT .................................................................................................... 1
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`RELEVANT FACTUAL ALLEGATIONS ................................................................................... 3
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`ARGUMENT .................................................................................................................................. 7
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`I.
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`II.
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`Legal Standards Governing Motions To Dismiss ............................................................... 8
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`Plaintiff Fails To Plead A Section 11 Claim ....................................................................... 8
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`A.
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`Plaintiff Fails to Plead That the Registration Statement Contained Material
`Misstatements About Growth ................................................................................. 9
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`1.
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`Plaintiff Does Not Adequately Allege That the Challenged
`Statements About Growth Were False ....................................................... 9
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`2.
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`The Challenged Statements About Growth are Immaterial Puffery ......... 10
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`B.
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`Plaintiff Fails to Plead That the Registration Statement Contained False or
`Misleading Statements About Bumble’s Expectations ......................................... 11
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`1.
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`Plaintiff’s Allegations Do Not Render the Challenged Statements
`About Bumble’s Expectations False or Misleading.................................. 11
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`2.
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`The Challenged Statements of Opinion are Immaterial Puffery ............... 12
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`The Registration Statement’s Presentation of Accurate Historical Results
`Was Not False or Misleading ................................................................................ 13
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`Plaintiff Fails to Plead That the Registration Statement’s Disclosure of
`Risks Was Misleading........................................................................................... 14
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`C.
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`D.
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`1.
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`2.
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`Bumble Disclosed the Risk That Had Materialized Before the SPO........ 14
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`The Remaining Risks Had Not Materialized as of the SPO ..................... 15
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`E.
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`The Undisclosed Information That Allegedly Rendered the Challenged
`Statements Misleading Was Not Material ............................................................ 18
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`F.
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`Plaintiff Fails to Plead a Violation of Item 303 .................................................... 19
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`III.
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`Plaintiff Fails To Plead A Section 12(a)(2) Claim............................................................ 22
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`A.
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`B.
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`Plaintiff Fails to Plead That the Prospectus Contained a Misrepresentation ........ 22
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`Plaintiff Fails to Plead That Bumble Was a 12(a)(2) Statutory Seller .................. 22
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`IV.
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`Plaintiff Fails To Plead A Section 15 Claim For Control Person Liability ...................... 23
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`A.
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`Plaintiff Has Not Alleged an Underlying Violation ............................................. 23
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`i
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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 3 of 34
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`B.
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`Plaintiff’s Allegations About the Blackstone Defendants’ “Control” Over
`Bumble are Insufficient......................................................................................... 24
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`CONCLUSION ............................................................................................................................. 25
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`APPENDIX A……………………………………………………………………………..... App-1
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`ii
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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 4 of 34
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`
`
`Cases
`
`
`
`TABLE OF AUTHORITIES
`
`Barilli v. Sky Solar Holdings, Ltd.,
`389 F. Supp. 3d 232 (S.D.N.Y. 2019) ....................................................................................... 12
`
`Blackmoss Invs. Inc. v. ACA Cap. Holdings, Inc.,
`2010 WL 148617 (S.D.N.Y. Jan. 14, 2010) .............................................................................. 20
`
`ECA & Loc. 134 IBEW Joint Pension Trust of Chicago v. JP Morgan Chase Co.,
`553 F.3d 187 (2d Cir. 2009) ...................................................................................................... 10
`
`Emerson v. Mut. Fund Series Tr.,
`393 F. Supp. 3d 220 (E.D.N.Y. 2019) ....................................................................................... 15
`
`Geffner v. Coca-Cola Co.,
`928 F.3d 198 (2d Cir. 2019) ........................................................................................................ 8
`
`Gotham Holdings, LP v. Health Grades, Inc.,
`534 F. Supp. 2d 442 (S.D.N.Y. 2008) ....................................................................................... 22
`
`In re Aluminum Warehousing Antitrust Litig.,
`2014 WL 4277510 (S.D.N.Y. May 18, 2004) ..................................................................... 24, 25
`
`In re Aratana Therapeutics Inc. Secs. Litig.,
`315 F. Supp. 3d 737 (S.D.N.Y. 2018) ....................................................................................... 15
`
`In re Bank of Am. AIG Disclosure Secs. Litig.,
`980 F. Supp. 2d 564 (S.D.N.Y. 2013) ....................................................................................... 10
`
`In re BHP Billiton Ltd. Secs. Litig.,
`276 F. Supp. 3d 65 (S.D.N.Y. 2017) ................................................................................... 18, 21
`
`In re Coty Inc. Secs. Litig.,
`2016 WL 1271065 (S.D.N.Y. Mar. 29, 2016) .................................................................... 13, 21
`
`In re Deutsche Telekom AG Secs. Litig.,
`2002 WL 244597 (S.D.N.Y. Feb. 20, 2002) ............................................................................. 23
`
`In re Morgan Stanley Info. Fund Secs. Litig.,
`592 F.3d 347 (2d Cir. 2010) ...................................................................................................... 23
`
`In re Omega Healthcare Inv'rs Secs. Litig.,
`563 F. Supp. 3d 259 (S.D.N.Y. 2021) ....................................................................................... 13
`
`
`
`iii
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`

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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 5 of 34
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`
`
`
`
`In re Petrobras Secs. Litig.,
`150 F. Supp. 3d 337 (S.D.N.Y. 2015) ....................................................................................... 24
`
`In re ProShares Tr. Secs. Litig.,
`728 F.3d 96 (2d Cir. 2013) .......................................................................................................... 8
`
`In re ProShares Trust II Secs. Litig.,
`2020 WL 71007 (S.D.N.Y. Jan. 3, 2020) .............................................................................. 8, 24
`
`In re WorldCom, Inc. Secs. Litig.,
`2004 WL 1097786 (S.D.N.Y. May 18, 2004) ........................................................................... 24
`
`Lau v. Opera Ltd.,
`527 F. Supp. 3d 537 (S.D.N.Y. 2021) ....................................................................................... 11
`
`Lematta v. Casper Sleep, Inc.,
`2022 WL 4637795 (E.D.N.Y. Sept. 30, 2022) .......................................................................... 13
`
`Martin v. Quartermain,
`732 F. App’x 37 (2d Cir. 2018) ................................................................................................. 12
`
`McMillian v. MTA Metro-North Railroad,
`2021 WL 4311318 (S.D.N.Y. Sept. 20, 2021) ............................................................................ 8
`
`Omnicare, Inc. v. Laborers Dist. Council Const. Indus. Pension Fund,
`575 U.S. 175 (2015) .................................................................................................................. 12
`
`Pearlstein v. BlackBerry Ltd.,
`93 F. Supp. 3d 233 (S.D.N.Y. 2015) ......................................................................................... 20
`
`Rosi v. Aclaris Therapeutics, Inc.,
`2021 WL 1177505 (S.D.N.Y. Mar. 29, 2021) .............................................................. 15, 16, 17
`
`Steamfitters Local 449 Pension Plan v. Skechers U.S.A., Inc.,
`412 F. Supp. 3d 353 (S.D.N.Y. 2019) ................................................................................. 11, 13
`
`Willard v. UP Fintech Holding Ltd.,
`527 F. Supp. 3d 609 (S.D.N.Y. 2021) ........................................................................... 18, 19, 20
`
`Yi Xiang v. Inovalon Holdings, Inc.,
`254 F. Supp. 3d 635 (S.D.N.Y. 2017) ................................................................................. 22, 23
`
`Statutes and Rules
`
`15 U.S.C. § 77k(a)........................................................................................................................... 8
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`iv
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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 6 of 34
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`15 U.S.C. § 77l .............................................................................................................................. 22
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`15 U.S.C. § 77o ............................................................................................................................. 23
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`17 C.F.R. § 229.303(a).................................................................................................................. 19
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`17 C.F.R. § 230.405 ...................................................................................................................... 24
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`Federal Rule of Civil Procedure 12(b)(6) ....................................................................................... 8
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`v
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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 7 of 34
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`Bumble Inc. (“Bumble” or the “Company”), Whitney Wolfe Herd (Bumble’s CEO and
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`director) and Anuradha Subramanian (Bumble’s CFO, and together with Herd, the “Executive
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`Defendants”), Bumble’s outside directors (the “Director Defendants”), the Blackstone
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`Defendants, and the Underwriter Defendants (collectively, “Defendants”) respectfully move for
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`dismissal of the Consolidated Amended Class Action Complaint (the “Complaint”) for failure to
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`state a claim.1
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`PRELIMINARY STATEMENT
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`The Bumble App and the Badoo App are two online dating apps operated by subsidiaries
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`of Defendant Bumble. Both apps offer their users free and paid membership options. As a
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`public company since early 2021, Bumble has publicly reported, on a quarterly basis, a number
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`of “key operating metrics,” including the number of paying users and the average revenue per
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`paying user on the Bumble App, the Badoo App, and both apps combined. Like most public
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`companies, however, Bumble does not disclose these metrics for quarters still in progress. In
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`this putative class action, Plaintiff Louisiana Sheriffs’ Pension & Relief Fund (“Plaintiff”)
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`challenges various statements made in connection with Bumble’s September 2021 Secondary
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`Public Offering (“SPO”), completed during Bumble’s third fiscal quarter. At the core of
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`Plaintiff’s challenge is the fact that the SPO Registration Statement (“Registration Statement” or
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`“RS”) and Prospectus (the “SPO Offering Documents”) did not disclose preliminary Q3 2021
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`information about Bumble. That challenge—alleging violations of Sections 11, 12(a)(2) and 15
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`of the Securities Act—fails.
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`1 Given the number of Director Defendants, Blackstone Defendants, and Underwriter Defendants, these
`defendants are listed in Appendix A.
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`1
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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 8 of 34
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`First, the claims brought under Sections 11 and 12(a)(2) fail because the Complaint does
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`not identify any actionable false or misleading statement:
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` Bumble’s affirmative statements about its “growth” were made in the context of
`the overall Bumble user community as a whole and not in the limited context of
`paying users in particular. Because Plaintiff has not even suggested that the user
`community did not grow, it fails to allege that the statements were false, much
`less materially so. See Section II.A, infra.
`
` Bumble’s statements about its expectations about the Company’s future prospects
`and the online dating market are not actionable because Plaintiff has not
`adequately alleged that these opinions were not actually held or that they were
`accompanied by untrue facts. See Section II.B, infra.
`
` The SPO Offering Documents’ presentation of Bumble’s historical data about
`paying users on the Bumble App and Badoo App was not misleading. It is black
`letter law that accurate historical data, without more, cannot support a securities
`claim. See Section II.C, infra.
`
` The SPO Offering Documents’ descriptions of risk factors were not misleading.
`Although Plaintiff alleges that the risks were presented as hypothetical when they
`had in fact materialized, the only risk that had materialized had been disclosed
`before the SPO, and the other risks had not materialized as of the SPO. In any
`event, the information that Plaintiff alleges should have been disclosed—the intra-
`quarter decline in total paying users and related metrics—was not material, as
`demonstrated by Bumble’s strong financial results during the quarter in which the
`SPO occurred. See Sections II.D-E, infra.
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`Item 303 of SEC Regulation S-K did not require disclosure of the number of
`paying users at the time of the SPO. The Complaint fails to adequately allege that
`a relevant trend or uncertainty existed at that time. See Section II.F, infra.
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`Second, the Section 12(a)(2) claim against Bumble also fails because Plaintiff does not
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`
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`allege that Bumble was a “statutory seller.” See Section III, infra.
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`Third, and finally, the Complaint fails to state a Section 15 claim against the Blackstone
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`Defendants because it lacks the factual allegations required to hold each of 45 separate
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`“Blackstone Defendants” liable as control persons. See Section IV, infra.
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`The Complaint should be dismissed with prejudice for failure to state a claim.
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`2
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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 9 of 34
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`Bumble’s Business
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`RELEVANT FACTUAL ALLEGATIONS2
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`At the time of the SPO, Bumble held companies that operated two online dating apps:
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`the Bumble App and the Badoo App.3 Compl. ¶ 3. The Bumble App is mostly used in the
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`United States, the United Kingdom, Australia and Canada; the Badoo App is mostly used in
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`Europe and Latin America. Id. ¶ 70.
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`The Bumble App and the Badoo App offer their users free membership and paid
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`membership options. Compl. ¶ 71. All members have access to certain aspects of the dating
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`apps, but paying members receive access to certain additional services. Id. Bumble monetizes
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`its apps primarily through the sale of memberships. Id.
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`Bumble tracked Bumble App and Badoo App paying users on a monthly basis. Compl.
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`¶ 108. Bumble reported paying users on a quarterly basis. Id.
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`The Complaint references statements from two purported former employees. FE-1, a
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`director in Bumble’s marketing organization in the U.K. from October 2019 through October
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`2021, attended meetings with Bumble’s Chief Marketing Officer (“CMO”), at some point during
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`which “a decline in growth in the U.S. market” was discussed. Compl. ¶¶ 101-102. FE-1
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`recalled that “the Company used an internally built system for tracking user metrics.” Id. ¶ 101.
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`FE-2, a Global Integrated Marketing Lead in the U.K. from June 2021 until an unspecified date
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`in September 2021, described “growth” as “non-existent at Badoo.” Id. ¶¶ 105-106. FE-2
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`2 Many of Plaintiff’s allegations relate to clearly irrelevant facts and time periods. See, e.g., Compl. ¶ 73
`(describing Bumble’s culture years before its IPO, let alone its SPO). The Complaint also fails to
`distinguish between filings made in connection with the IPO, with the SPO, or at some other time. See,
`e.g., id. ¶ 25 (quoting from “Bumble’s SEC filings” without identifying the filing).
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`3 As used herein, “Bumble App” refers to the app; “Bumble” refers to the defendant that holds the
`companies that operate the Bumble App and the Badoo App.
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`3
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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 10 of 34
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`recalled discussing with Bumble’s CMO “in July and August 2021” that “Badoo was in decline”
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`and needed “a new marketing plan.” Id. ¶ 106.4
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`Public Offerings of Bumble Stock
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`Bumble has been a public company since its IPO in February 2021. Compl. ¶ 89. Its
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`IPO is not at issue in this litigation. Plaintiff alleges that Bumble conducted the SPO “[o]n or
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`about September 10, 2021,” before the end of the third quarter. Id. ¶ 111.
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`The Registration Statement incorporated by reference Bumble’s 2020 10-K, filed on
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`March 15, 2021. The Registration Statement made several references to growth in different
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`contexts: “As our community continues to grow, user engagement and monetization increase”;
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`“Our financial model is characterized by a rare combination of growth, scale, strong profitability
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`and cash flow generation”; and “We have created a large, growing and engaged community with
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`approximately 2.9 million average Total Paying Users as of June 30, 2021.” Compl. ¶¶ 128-129.
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`The Registration Statement also stated that Bumble expected to have “significant upside
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`in our core online dating market driven by . . . increasing propensity for users to pay” and that
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`“[w]e are still early in our monetization journey and expect to increase paying users.” Compl.
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`¶¶ 130-131.
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`The Registration Statement provided or incorporated historical information related to
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`paying users on the Bumble App and the Badoo App, including data for the most recent quarter
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`(Q2 2021). Bumble disclosed that it had 2.93 million paying users (1.47 million on the Bumble
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`App and 1.45 million on the Badoo App) as of June 30, 2021, the end of the last full quarter
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`before the SPO. Compl. ¶ 97. Like the Registration Statement filed in connection with
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`4 The Complaint also inexplicably provides statements attributed to a data analyst at Bumble in the U.K.
`who left Bumble before the SPO, and indeed before the beginning of Q3 2021. Compl. ¶ 107.
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`4
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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 11 of 34
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`Bumble’s IPO, the Registration Statement did not provide information about the quarter then in
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`progress.
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`Finally, the Registration Statement disclosed risks concerning the potential impacts of
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`declining user growth, declining paying user growth, and COVID-19. See Compl. ¶¶ 134-138;
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`Section II.D, infra. The possibility that the size of Bumble’s user base would fluctuate or decline
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`as a result of numerous factors was disclosed as an expectation:
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`“Our financial performance has been and will continue to be significantly determined by
`our success in adding, retaining and engaging users of our products and converting users
`into paying subscribers or in-app purchasers. We expect that the size of our user base
`will fluctuate or decline in one or more markets from time to time.” Ex. A5 (2020 10-K)
`at 14.
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`Unlike with the IPO, Bumble did not sell any shares in, and did not receive any proceeds
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`from, this public offering. Compl. ¶ 68.
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`Announcement of Q3 2021 Results
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`Bumble announced its Q3 2021 financial results on November 10, 2021. Compl. ¶ 116.
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`Bumble reported 1.33 million paying users on the Badoo App and 1.53 million paying users on
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`the Bumble App. Id. ¶ 98. Paying users on the Badoo App thus decreased by 120,000 relative to
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`the prior quarter; paying users increased by 60,000 on the Bumble App. Id. Thus, netting the
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`changes on the two apps, there was a decrease of 60,000 paying users during Q3 2021. Some
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`analysts reacted to Bumble’s announcement by observing that the Bumble App and Badoo App
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`paying user totals and Badoo App revenue missed analyst expectations. Id. ¶¶ 119-120.
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`As depicted in the below chart, the Q3 2021 results reported by Bumble nonetheless
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`reflected year-over-year growth for total paying users, as well as year-over-year and quarter-
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`5 Citations to “Ex.” refer to the documents attached as Exhibits A through K to the concurrently filed
`Declaration of Jonathan K. Youngwood, which are the subject of Defendants’ concurrently filed Request
`for Judicial Notice.
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`5
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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 12 of 34
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`over-quarter Total Revenue and Adjusted EBITDA growth that exceeded the Company’s
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`guidance:
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`Q3 2020
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`Q2 2021
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`Total Paying Users
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`2.74 million
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`2.93 million
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`Q3 2021
`Guidance Range
`N/A
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`Q3 2021
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`2.87 million
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`Bumble App
`Paying Users
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`Badoo App and
`Other Paying Users
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`Total Revenue
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`Adjusted EBITDA
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`1.28 million
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`1.47 million
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`N/A
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`1.53 million
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`1.46 million
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`1.45 million
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`N/A
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`1.33 million
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`$162.3 million
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`$186.2 million
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`$195-198 million $200.5 million
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`$53.7 million
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`$51.9 million
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`$48-50 million
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`$54.5 million
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`See Ex. B (Q3 2021 Form 10-Q) at 35; Ex. C (Q2 2021 Form 10-Q) at 35; Ex. D (Aug. 11, 2021
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`Form 8-K) at 5. The Company increased its Q4 2021 and full year guidance for revenue and
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`Adjusted EBITDA, which it ultimately met as well. See Ex. E (Nov. 10, 2021 Form 8-K) at 4-5;
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`Ex. F (Mar. 8, 2022 Form 8-K) at 4-5.
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`Bumble’s stock price decreased from a closing price of $47.75 on November 10, 2021 to
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`a closing price of $38.56 on November 11, 2021, and then to a closing price of $36.55 on
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`November 12, 2021. Compl. ¶ 124.
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`The “Blackstone Defendants”
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`Blackstone Inc. is in the “alternative asset management business.” Compl. ¶ 22. At some
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`unstated time before the SPO, the “Blackstone Defendants” beneficially owned 45.7% of
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`Bumble’s Class A common stock and 23.2% of Bumble’s Common Units, “which gave
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`Blackstone combined voting power of 76.1% over Bumble.” Id. ¶ 24. “Blackstone” and the
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`“Blackstone Defendants” is the term Plaintiff uses to refer collectively to Blackstone Inc., 43
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`other legally separate entities, and Stephen A. Schwarzman. Id. ¶ 22; App. A. Plaintiff does not
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`allege which entities controlled shares, the number of shares controlled by each, or the type of
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`6
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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 13 of 34
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`control each could exercise over Bumble. Instead, the Complaint (1) alleges that the SPO
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`Offering Documents stated that each entity and Mr. Schwarzman “may be deemed to beneficially
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`own the [Bumble] securities directly or indirectly controlled by such Blackstone entities or
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`him,”6 (2) alleges each fund’s relation, if any, to the seven identified Blackstone funds that sold
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`shares in the SPO, and (3) lists the seven funds that were signatories to a Stockholders
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`Agreement and Registration Rights Agreement. Compl. ¶¶ 26-27; Ex. G (RS) at 57.
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`The Stockholders Agreement dated February 10, 2021 gave “Blackstone” “broad rights to
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`designate directors, including a majority depending on Blackstone’s holdings . . . sweeping rights
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`to obtain information regarding Bumble’s operations and finances,” and consent rights regarding
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`changes in the Bumble Board or operating documents. Compl. ¶ 77.
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`The Registration Rights Agreement dated February 10, 2021 gave “Blackstone and its
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`affiliates . . . sweeping rights to cause Bumble to sell shares to the investing public, at the
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`Company’s expense.” Compl. ¶ 80. Blackstone exercised those rights through the SPO. Id. ¶ 6.
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`ARGUMENT
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`On these facts, Plaintiff brings a Section 11 claim against Bumble, the Executive
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`Defendants, the Director Defendants, and the Underwriter Defendants; a Section 12(a)(2) claim
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`against Bumble and the Underwriter Defendants; and a Section 15 claim against the Executive
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`Defendants and the Blackstone Defendants. All of the claims should be dismissed.
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`6 Plaintiff omits the language that follows its quoted language: “but each disclaims beneficial ownership
`of such securities (other than the Blackstone Funds to the extent of their direct holdings).” See, e.g., Ex.
`G (RS) at 57.
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`7
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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 14 of 34
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`I.
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`Legal Standards Governing Motions To Dismiss
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`“To survive a motion to dismiss [under Federal Rule of Civil Procedure 12(b)(6)], a
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`complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is
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`plausible on its face.” Geffner v. Coca-Cola Co., 928 F.3d 198, 199 (2d Cir. 2019) (citing
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`Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted)). “Threadbare
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`recitals of the elements of a cause of action, supported by mere conclusory statements, do not
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`suffice.” In re ProShares Trust II Secs. Litig., 2020 WL 71007, at *5 (S.D.N.Y. Jan. 3, 2020)
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`(Cote, J.) (citing Empire Merchants, LLC v. Reliable Churchill LLP, 902 F.3d 132, 139 (2d Cir.
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`2018)) (internal quotations omitted). Moreover, “conclusory allegations, especially ‘legal
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`conclusion[s] couched as a factual allegation,’ are not assumed to be true.” McMillian v. MTA
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`Metro-North Railroad, 2021 WL 4311318, at *5 (S.D.N.Y. Sept. 20, 2021) (citing Iqbal, 550
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`U.S. at 555).
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`II.
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`Plaintiff Fails To Plead A Section 11 Claim
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`Section 11 liability may be imposed if a registration statement “contains an untrue
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`statement of a material fact or omits to state a material fact required to be stated therein or
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`necessary to make the statements therein not misleading.” 15 U.S.C. § 77k(a). “To state a
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`plausible section 11 claim based on an alleged omission, a complaint must . . . identify an
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`omission that is (1) unlawful and (2) material.” In re ProShares Tr. Secs. Litig., 728 F.3d 96,
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`102 (2d Cir. 2013). For both false statements and omissions, information is material only if, “in
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`light of the information already disclosed to investors,” there is “a substantial likelihood that the
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`disclosure of the [omitted material] would have been viewed by the reasonable investor as
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`having significantly altered the total mix of information [already] made available.” Id.
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`(alternations and emphases in original).
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`8
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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 15 of 34
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`
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`A.
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`Plaintiff Fails to Plead That the Registration Statement Contained Material
`Misstatements About Growth
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`1.
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`Plaintiff Does Not Adequately Allege That the Challenged Statements
`About Growth Were False
`
`Plaintiff challenges the following statements about the Bumble community’s growth:
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`“As our community continues to grow, user engagement and monetization increase.
`These increases enable us to reinvest in product innovation and marketing and, in
`turn, attract more people to our platform.” Compl. ¶ 128.
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`“A Large, Growing, Engaged Community. We have created a large, growing,
`engaged community with approximately 2.9 million average Total Paying Users as of
`June 30, 2021, up 24.9% from June 30, 2020.” Compl. ¶ 129.
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`Plaintiff claims that these statements were false because the following had occurred by
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`the end of Q3 2021: (i) a decrease in total paying users, (ii) a decrease in paying users on the
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`Badoo App and related quarter-over-quarter revenue decline, both in part due to a payment
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`platform transition, and (iii) a slowdown of Bumble App paying user growth. Compl. ¶ 133.
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`Plaintiff’s theory, however, suffers from a fatal defect—the challenged statements do not say
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`anything about the number of Total, Bumble App, or Badoo App Paying Users. Rather, they
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`refer more broadly to Bumble’s “community.”
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`Significantly, Bumble’s “community” is not limited to paying users.7 Rather, it
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`encompasses all users of its apps, whether or not they pay for memberships. See, e.g., Ex. A
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`(2020 10-K) at 10 (discussing general user acquisition as “How We Grow Our Community,”
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`noting that community growth “benefit[s] from the fact that people can download and use our
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`apps for free”). The Registration Statement sentence immediately following the second
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`statement also makes clear that “community” refers to all users. See Ex. G (RS) at 5 (noting that
`
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`7 The second statement’s reference to paying users provides the number of total paying users as of the end
`of the prior quarter. Presentation of accurate historical data cannot be false or misleading as a matter of
`law. See Section II.C, infra.
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`9
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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 16 of 34
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`“more users on the platform improv[es] selection, which improves user experience and drives
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`even more users to our platform”). Thus, although Plaintiff alleges that total and Badoo App
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`paying users had declined as of the SPO or the end of Q3 2021, Compl. ¶¶ 116, 133, the
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`Complaint does not allege that the number of Bumble’s total users or community did not grow.
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`Indeed, as Bumble disclosed with its third quarter results, it “saw strong engagement across the
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`app[, w]ith record levels of activity once again in monthly active and daily active users.” Ex. H
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`(Q3 2021 Earnings Call Transcript) at 3. Thus, Bumble’s statement about community growth
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`was not false. Cf . In re Bank of Am. AIG Disclosure Secs. Litig., 980 F. Supp. 2d 564, 582
`
`(S.D.N.Y. 2013) (holding that allegedly misleading statements “about representation and
`
`warranty claims could not have misled investors about the imminence and amount of the
`
`potential AIG fraud and securities suit” because AIG’s claims “are not representation and
`
`warranty claims”).
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`Plaintiff also attempts to characterize as false the statement that “our financial model is
`
`characterized by a rare combination of growth, scale, strong profitability, and cash flow
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`generation.” Compl. ¶ 128. There is no basis, however, to view total paying users as a proxy for
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`“financial model.” Indeed, what follows this challenged statement in the Registration Statement
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`is a summary of Bumble’s revenue, earnings, EBITDA, and cash flow. Ex. G (RS) at 3.
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`Bumble’s actual “financial model” was indeed characterized by growth in Q3 2021, as its
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`revenue and EBITDA both grew quarter-over-quarter and year-over-year. See p. 6, supra.
`
`2.
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`The Challenged Statements About Growth are Immaterial Puffery
`
`Because puffery statements are “too general to cause a reasonable investor to rely upon
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`them,” they cannot give rise to securities violations. ECA & Loc. 134 IBEW Joint Pension Trust
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`of Chicago v. JP Morgan Chase Co., 553 F.3d 187, 205-206 (2d Cir. 2009).
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`10
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`Case 1:22-cv-00624-DLC Document 48 Filed 11/18/22 Page 17 of 34
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`Here, the alleged misstatements describe Bumble’s community as “growing” and its
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`financial model as “characterized by a rare combination of growth.” Compl. ¶¶ 128-129. These
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`general statements about growth are loose optimism that courts have consistently held to be
`
`immaterial puffery at the pleading stage. See Steamfitters Local 449 Pension Plan v. Skechers
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`U.S.A., Inc., 412 F. Supp. 3d 353, 364 (S.D.N.Y. 2019) (treating as puffery statements that “[t]he
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`good news is we’re growing at a faster pace than even our consumers around the world
`
`anticipate” and “I think it’s fair to say that . . . our business grows”). They lack any concrete
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`parameters that would allow reasonable investor reliance. See Lau v. Opera Ltd., 527 F. Supp.
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`3d 537, 547, 552-553 (S.D.N.Y. 2021) (“The statements about [defendant’s] growth and being a
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`market leader are corporate optimism more appropriately described as puffery.”).
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`B.
`
`Plaintiff Fails to Plead That the Registration Statement Contained False or
`Misleading Statements About Bumble’s Expectations
`
`1.
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`Plaintiff’s Allegations Do Not Render the Challenged Statements
`About Bumble’s Expectations False or Misleading
`
`Plaintiff also challenges two opinion statements about Bumble’s perception of the dating
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`app market and its expectations about future monetization prospects.
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`“We see significant upside in our core online dating market driven by the steady growth
`of the global singles population, increasing adoption of online dating and increasing
`propensity for users t