PITTSBURGH — Despite Duolingo boasting over 50 million daily active users for the first time ever during its quarterly earnings call, the edtech titan’s stock dropped over 25% on Thursday.
East Liberty-headquartered Duolingo (NASDAQ: DUOL) saw billions erased from its market cap as its stock dropped approximately $67 to $193 per share at market close after hitting a low point of $182 per share earlier in the day. The drop comes alongside a broader tech stock downturn amid growing concerns of an AI bubble, but Kim Caughey Forrest, founder and chief investment officer at Bokeh Capital Partners LLC, said that the drastic disproportion shows that investors are unhappy with the direction of the company. Namely, a decision by it to prioritize long term user growth over further monetization.
“The severity of the drop says the investors who bought into the company earlier are not happy with the direction,” Forrest said. “They’re going to be building out their platform into the future to address more and people just don’t want that or at least the investors who bought those shares don’t want that, that’s why Duolingo is going down today. If the whole AI market goes down, I believe they will continue to go down, but not in any greater or lesser manner, maybe even in a lesser manner because they’ve already gotten their hair cut.”
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