Problems at Ibotta (IBTA)
Ibotta (NYSE: IBTA — $1.25 billion) is a digital couponing company on a mission to “make every purchase rewarding.” Ibotta’s app allows users to activate cashback coupons for hundreds of everyday items like Brawny paper towels, Cheetos, and Old Spice deodorant. In addition, Ibotta has created an “AI-enabled technology platform” to bring these coupon offers into the loyalty programs of major retailers. At its best, Ibotta helps consumer brands acquire new customers and helps frugal families earn cashback on their essential shopping. With its stock cut in half since its April 2024 IPO, optimists believe Ibotta is a next-generation couponing company trading at a discount.
The Bear Cave views Ibotta as a broken business. Since going public, the company’s growth has consistently missed expectations and The Bear Cave’s review of online commentary finds waning consumer support, severe employee dissatisfaction, concerns of strained partner relationships, and allegations of fraud. Even near current lows, The Bear Cave believes that as Ibotta’s growth turns negative, the company can go much lower.
A basic problem with all coupon companies is that consumers who like using coupons generally don’t like spending money — a tough demographic to monetize.