Affirm experienced a stark contrast in holiday cheer compared to a year ago. In 2022, the point-of-sale lender faced challenges such as rising interest rates, recession fears, and weakening consumer spending, leading to a substantial decline in Affirm shares by 90% and the loss of billions in market value.
However, the outlook has significantly improved for Affirm investors in 2023. The stock saw an impressive surge of 430% throughout the year, surpassing all other major U.S. tech companies valued at $5 billion or more. Only Coinbase came close with a 423% increase, largely attributed to the rebound of bitcoin.
The situation changed due to several factors. The Federal Reserve’s indication of future interest rate cuts has provided a favorable backdrop, and an increasing number of retailers have embraced Affirm’s buy now, pay later offerings, known as BNPL. Consequently, concerns about a potential doomsday scenario for the company have diminished. In November, Affirm experienced a significant boost in share value after securing an expanded partnership with Amazon. Additionally, the volume of BNPL purchases reached a record high on Cyber Monday, further contributing to the positive sentiments surrounding Affirm.
Source (CNBC)
