Cookie crumbles: stories you may have missed

Not that long ago, bakeries specifically dedicated to serving freshly baked cookies were all the rage. People were going crazy over them, no matter that – as foodie site bon appétit put it – their offerings were “too sweet, mostly flavorless, and five bucks a pop.”

They were the flavor of the week nonetheless, inspiring franchise openings all across the nation from names like Crumbl and Chip City. And there were plenty of mom-and-pop operators that opened up as well to take advantage of the craze.

Problem with crazes is that, oftentimes, people wake up and realize the insanity they subscribed to wasn’t really worth it. And so they go on their merry way, leaving the fad behind until some other must-have product goes viral.

Like frozen yogurt bars. That’s apparently where the fun food focus is now. And better yet in this economy, customers get more bang for their buck along the way.

Cookie shops’ decline made the news across multiple outlets this past week on the report that 57 Crumbl locations have shut down so far this year. Considering how the company’s sales are down 70% from two years ago, it’s actually miraculous that the number isn’t higher.

Meanwhile, Chip City shuttered all of its stores with no warning on October 2, explaining how, “despite extensive efforts to stabilize our business in the face of significant macro-economic headwinds, we have made the very difficult decision to close all of our Chip City locations.”

Management also thanked its “customers and employees alike” – the latter of whom, incidentally, were notified the night before via email that they no longer had jobs.

Here’s another fad that’s run out the clock: internet dating. Especially if we’re talking about the Bumble (BMBL) app.

Bumble, which launched at the tail end of 2014, made an initial buzz for its pro-woman stance. Men couldn’t make the first moves on there: Each new interaction had to be initiated by a female.

Those were the rules, and the rules intrigued enough investors that Bumble went public in 2021 at $43 per share. And within the week, it had rocketed up to $78.89.

But it’s been in pretty consistent – and significant – decline ever since. At last check, it was trading at $5.94, and that was after the stock got a boost from buyout news.

It looks like investment firm Ithaca Holdings will be purchasing Bumble for $1.3 billion as “a bet on the future of humanity.” The goal, apparently, is to “renew and accelerate business… in a world transformed by AI.”

In other words, they want to put artificial intelligence to work at improving Bumble usage and profitability.

That might not be the wisest business decision, however, considering how dating apps in general have fallen out of favor. For one thing, Gen Z, which is at prime dating age, just isn’t that large a group. So neither is the dating customer pool.

But younger people are also increasingly becoming disillusioned with internet offerings. They want in-person experiences from start to finish, which means attending speed-dating events and the like.

The lesson we all can learn from both Crumbl and Bumble is simple: Don’t invest on hype alone. Invest on fundamentals.

Anything else will almost undoubtedly disappoint.

Two weeks ago, I wrote about Meta’s (META) new Muse AI agent and how I tried it out for myself. And, boy, but was I impressed with how it handled what I gave it.

Along with browsing the internet, filling out forms, sending emails, booking travel, and making purchases, Muse can:

My biggest problem with Muse came down to a matter of trust, or lack thereof, in Meta. The company has been involved in far too many scandals, promising privacy and then trampling all over it.

So did I really want to give it access to everything? Likewise, how many others felt the same way I did?

Well, I got my first short-term clue on the answer this Tuesday thanks to new analysis from Sensor Tower. While Muse is still very much new – having only been released last month – 73% of users are apparently coming back to it the day after they installed it.

That’s twice the rate of OpenAI’s ChatGPT version, so a clear win for Muse.

Then again, the novelty wears off quickly enough, it seems, with ChatGPT winning out again by Day 9, leaving Muse in second place after all.

Second place in this race is still impressive, mind you. Then again, as our first two stories showed, nothing is guaranteed – particularly after a mere month.

I still need to see a lot more data before I make a conclusion one way or the other about Muse’s long-term prospects. And in the meantime, I’m left debating what to do with it myself.

Happy SWAN investing,

Brad Thomas
Editor, The Wide Moat Daily