AFRM Stock: Why It Decreased Today

By Amit Chowdhry ● September 13, 2021
  • The stock price of Affirm Holdings Inc (NASDAQ: AFRM) fell by over 11% during intraday trading today. This is why it happened.

The stock price of Affirm Holdings Inc (NASDAQ: AFRM) fell by over 11% during intraday trading today. It is not entirely clear why the stock price fell since there was not any direct news from the company today. 

It is worth mentioning that there was a broader selloff in the market today. And Affirm’s stock price is up more than 70% over the past month so many investors decided today to collect profits. Affirm’s stock price had surged when the company announced a “Buy Now, Pay Later” partnership with Amazon for purchases made over $50.

Another catalyst that likely affected the stock price today was a study published from last week (Credit Karma via Reuters) revealing that a third of U.S. consumers who used “buy now, pay later” services fell behind on one or more payments. And 72% of those said that their credit scores declined.

Plus Seeking Alpha published a bearish article about Affirm Holdings this morning. The Seeking Alpha report indicated that investors should consider holding their current positions, but remain cautious about buying a position at the current valuation.

“Over time, as these stimulus programs wear off and consumers naturally build up their credit-related debt, which includes BNPL, I believe credit risk will rise. In a credit crisis, it’s possible that consumers focus more on their essential debt, such as mortgages and auto loans, rather than the $50 Amazon purchase that is being paid back via BNPL installments,” said Seeking Alpha in the report.

Affirm’s the stock price is also trading slightly lower after hours. A Bloomberg report was just published about how Capital One Financial is going to be testing a new buy-now, pay-later service that competes head-on against Affirm.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.