Affirm’s Shopify Commitment

May 13, 2022

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Affirm’s Shopify Commitment

Shares of Affirm Holdings (Nasdaq: AFRM) soared 33.59% in after-hours trading on Thursday after the financial technology company posted positive financial earnings.

Financials: Affirm reported a loss of 19 cents per share and revenue of $354.8 million; both were better than expected.

Consumer Growth: The number of active consumers on Affirm’s platform grew 137% to 12.7 million. And 81% of transactions were from repeat Affirm users.

Background: Affirm has a Buy Now, Pay Later platform, which allows consumers to spread out payments for goods and services over a few monthly installments.

Partnership: Affirm also announced Thursday a multi-year partnership with Shopify (NYSE: SHOP) that allows Affirm to be the exclusive pay-over-time provider in the U.S. This and other partnerships, notably Amazon (Nasdaq: AMZN), have allowed Affirm to flourish.

Bottom Line: This company is still losing money but aims to be profitable on an adjusted operating income basis by next July.

Final Thoughts: Affirm has strong partnerships, but if more users default on their monthly loans (something that will be heightened in this economy) that could spell trouble for the company.

Notables

Notable Earnings Today: Biofrontera (Nasdaq: BFRI), LifeMD (Nasdaq: LFMD), New York City REIT (NYSE: NYC), IMV (Nasdaq: IMV), Honest Company (Nasdaq: HNST), Humacyte (Nasdaq: HUMA), PLx Pharma (Nasdaq: PLXP), Superior Drilling Products (NYSEAMERICAN: SDPI), Hippo Holdings (NYSE: HIPO), Deutsche Telekom (OTCMKTS: DTEGY), Honda Motor (NYSE: HMC), Real Good Food (Nasdaq: RGF).

Notable IPOs Today: SOS Hydration Inc. (Nasdaq: SOSH), Wytec International Inc (Nasdaq: WYTC), Innovative Eyewear Inc (Nasdaq: LUCY), Actelis Networks Inc (Nasdaq: ASNS), TenX Keane Acquisition (Nasdaq: TENKU).

Notable Equity Crowdfunding Campaigns Ending Today: Big C Waffles (MainVest).

Notable Economic Events Today: Export / Import Price Index (8:30 a.m. ET), Michigan Consumer Sentiment / Expectations (10:00 a.m. ET).

Robinhood’s Newest Investor

Photo by Andrew Neel / Unsplash

Shares of Robinhood Markets (Nasdaq: Hood) jumped 23.83% in after-hours trading on Thursday after it was announced that the CEO of a cryptocurrency exchange took a stake in the company.

Details: According to an SEC filing, FTX CEO Sam Bankman-Fried took a 7.6% stake in Robinhood through the company Emergent Fidelity Technologies for $648 million. Bankman-Fried does “not currently have any intention of taking any action toward changing or influencing the control” of the company, the filing said.

Numbers: In the past six months, shares of Robinhood are down 75%.

Final Thoughts: The investment sounds like a good one for Bankman-Fried, but this news doesn’t change Robinhood’s many long-term challenges.

Is FAANG Still Good?

For years, many investors gravitated to the FAANG stocks - Meta, which used to be Facebook (Nasdaq: FB), Apple (Nasdaq: AAPL), Amazon (Nasdaq: AMZN), Netflix (Nasdaq: NFLX), and Google’s parent company Alphabet (Nasdaq GOOGL).

Numbers: For the year so far, Apple is down about 21%, Google is down 22%, Amazon is down 37%, Facebook is down 43% and Netflix is down 70%.

Analysis: Because of these declines, many investing pros say that the FAANG trade is dead.

Final Thoughts: FAANG could still have a place in an investor’s portfolio, but it really depends on many factors. Either way, FAANG stocks are not what they used to be.

Trends to Watch

Nothing to Worry About Here: Dow Falls as Inflation Worries Weigh on Markets (The Wall Street Journal)

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