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Duolingo's Latest Move: Animation Studio Buyout Fails to Impress Investors

Duolingo (DUOL) - ★★★★

Ranked #5 in Q3 2024 SMID Equity Rankings

Language learning app Duolingo (NASDAQ: DUOL) saw its stock price decline by 5% on Tuesday following news of its latest acquisition. This latest drop contributes to Duolingo's challenging year in the stock market, with shares now down 16% year-to-date. Adding to investor concerns, the stock has been trading below both its 50-day and 100-day moving averages since May 2024, indicating a bearish trend.

Source: TradingView

The acquisition brings 12 new team members to Duolingo's design ranks, including motion designers, animators, creative strategists, directors, and producers. Hobbes has already been collaborating with Duolingo as a motion design partner, contributing to key features for Duolingo Music, product architecture, and animation design systems.

While the move appears to align with Duolingo's strategy to enhance its visual and interactive elements, investors seem cautious about the company's expansion efforts. The financial terms of the deal were not disclosed, leaving questions about the acquisition's impact on Duolingo's bottom line.

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