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Pennywise the Clown was a Babadook

The Babadook infested the Overlook Hotel. When Jack Torrance froze to death the Babadook moved on.

The Babadook is a Bogart
But seriously, if he's a boggart, his shadowy true form makes sense, and would explain why you don't know what he really looks like. But how do you "Riddikulus" a monster already in a "funny disguise"?
  • Similarly, the Babadook could be a Dementor.

How exactly the Babadook works (spoilers)

Okay, I've seen The Babadook many times, and I never really understood just why the eponymous creature behaves the way it does or what it wants. Indeed, the WMG just below even proposes the theory that Mr. Babadook doesn't exist, something that I have taken into account when creating this theory. However, after reviewing the movie once more, specifically trying to think from Babby's perspective, I've come up with what I believe to be a reasonable theory.

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The Babadook does indeed exist, not as a figment of Sam or Amelia's imagination, but as a living, genuine Eldritch Abomination. His intention throughout the movie is to eat Sam, but he can't interact with living beings at this point. The Babadook is strengthened by fear and denial, and at the beginning of the movie he’s too weak to attack directly. Every coat you see in the background with a hat hanging above it is indeed the creature watching from afar and studying his prey to determine the most efficient way to inspire fear in them. After learning that Amelia once wrote children’s books, he writes the Babadook book and slips it onto Samuel’s bookshelf. Once they’ve read it, they know of his existence and have ensured that they can’t get rid of him.

Mr. Babadook also learns that Sam dreams of being a magician. His top hat, cape, and flashy claws are a reflection of this. He also sees Amelia clutching the picture of her late husband, giving him the idea of scribbling out his face in the photo of him, and later taking his form to trick her. When he sees her freaking out over the cockroach infestation (that he is implied to have caused), he makes his next appearance by skittering across the ceiling with jerky, insectoid movements. When she tears up the book, he sees that it is a source of fear for her and repairs it, adding more threatening images to enhance the effect.

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He also makes an effort to prevent Amelia’s attempts to ask for help, seeking to isolate his prey. He appears before her at the police station and behind Mrs. Roach, the two people most capable of aiding her, and later cuts the phone line when Sam tries to call for help.

At this point, Amelia is terrified enough that he can begin influencing her, but Samuel’s attitude towards monsters makes him less vulnerable. To rectify this, he uses Amelia to give Samuel sleeping pills (which are implied to make him more susceptible to The Babadook), and causes her to lash out in anger (once again playing off of Sam’s fear). He also appears to Amelia as Oskar in order to bargain with her for Sam’s life. Eventually, Mr. Babadook decides to finalize Amelia’s possession and go after Sam personally, taking off his “funny disguise”. Now in complete control, he immediately kills Bugsy,the only one who could sense his presence.

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Then, in a bizarre sequence, he grabs one of Amelia’s molars and rips it out. Seems random, but if you look back you’ll notice that that tooth constantly aches and bothers Amelia. Now that he is in her body, The Babadook feels that discomfort and pulls the tooth. This is our first hint that he can be damaged while trapped inside a mortal host. Going after Sam now, it tries to manipulate him at first before giving up on that and going for the kill. Sam, however, shows just why he’s not scared of monsters and kicks Mr. Babadook’s ass using the traps and weapons he’s been stockpiling. After tying Babadook!Amelia to the floor, he manages to reawaken her with the Power of Love right as the Babadook tries to strangle him. Amelia, seeing her son in danger, manages to damage Mr. Babadook from within and drive him from her body.

Now desperate, the creature tries to telekinetically attack Samuel, but fails due to Amelia no longer being afraid of it, even when it impersonates Oskar again. He advances on them in his true form as a last resort, but Amelia shouts him down. Here we see her from the monster’s perspective: a shrieking, enraged being, suddenly immune to his powers and fully prepared to tear him to pieces if he remains in her presence.

The Babadook tries to flee, but now his greatest strength becomes his weakness: You can’t get rid of the Babadook. Thus he is forced to live out the rest of his life as little more than a family pet, dependent on the very being who first taught him fear.

Essentially, my main point is that nothing the Babadook does in the movie represents its true self until the very end. If he came after you, he might not even resemble the movie's Babadook at all. He would be whatever he needs to be in order to make you suffer. Who knows? Maybe he's already chosen his prey, and is watching you right now... ready to bring all the darkest corners of your mind to life.

There is no Babadook

Amelia suffers from an undiagnosed mental disorder, something like bipolar disorder, which is aggravated by the stress of Sam acting out and the loss of her husband. Everything she sees or hears is a hallucination, all of her possessions are her getting worse. Sam, who suffers from a similarly undiagnosed disorder and is only six years old, cannot comprehend what is happening to his mother and blames it on an imaginary monster. Amelia was the one who repaired the Babadook book.

The Babadook is mad that they mispronounced it's name.

It introduces itself by saying "Ba ba DOOK (rhymes with "nuke")." They've been pronouncing it to rhyme with "look." It's attacking them because they annoyed it.

There will be a sequel about Samuel in 20 years.

He'll be an up-and-coming Magician, taking the Maybe Magic, Maybe Mundane aspect Up to Eleven. The film with end with him conquering the Babadook, exactly as his mother did, and forcing it to perform in his show. The final shot of the film will be Samuel smiling at the camera, having performed a seemingly impossible trick. It's up to the audience to decide whether he's the greatest illusionist to ever live, or if he used the Babadook's magic.

Either Sam or Amelia (or both) is a reality warper, unaware of their abilities.

The Babadook doesn't exist until either Amelia or Sam wills it to exist as a tangible supernatural force.

Possibility 1: Amelia's grief over Oskar's death manifests in reality as Mr. Babadook.

Possibility 2: This is the more likely theory: Sam "wishes" for a monster that he and his mother can fight together and protect each other from. This is exactly what he gets. The details are beyond his control, manifesting whatever is necessary for Amelia to believe. This would also explain why he's able to do his magic trick with the dove at the end, which was obviously more than it seemed - having finally bonded with Amelia, helping her conquer the monster, he is learning to control his powers more directly. He is basically the kid from the Twilight Zone episode "It's a Good Life" - he's just not aware of it.

Babadook is Slenderman
It never stops stalking you. It can isolate you when you are surrounded by people, appearing only to you and not them. Both have been called metaphors for mental illness.
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