Affirm, a leader in the burgeoning “buy now, pay later” space, on Thursday had itself a post-now, pay-for-it-later moment.
The San Francisco-based company is now heading into the weekend fresh off the heels of a major stock crisis. After capping its first year on the Nasdaq last month, Affirm was due to release its second-quarter results this week—but evidently, somebody managing Affirm’s social media was little too eager and published a celebratory blurb of earnings data on Twitter well ahead of time.
That post from the official Affirm account was quickly deleted—but not before users took screenshots and circulated them to investors. The company’s stock price has plunged a staggering 40% since the full earnings were released following the snafu (which its spokespeople blamed on “human error” in a follow-up tweet).
Due to human error, a small portion of Affirm’s fiscal Q2 results were inadvertently tweeted from Affirm’s official Twitter account earlier today. Affirm has since issued its complete fiscal Q2 results, which are available at https://t.co/kQLTu8O9Vv.
— Affirm (@Affirm) February 10, 2022
Per a review of the screenshots, the tweet was positive; and in fact, Affirm shares jumped up to 10% shortly after the post. But the mishap led the company to release its full report just over an hour later, earlier than scheduled, and that’s when things went south.
As it were, the full report was not as rosy as the Twitter seed might have planted: Sales revenue did beat expectations for 2022 Q2, but its operating losses were also larger than expected at negative-57 cents per share versus negative-32 cents per share. Furthermore, its Q3 guidance included a revenue outlook of $325 to $335 million versus analyst estimates of $335 million flat. Investors were also betting on a lift from Affirm’s blockbuster deal with Amazon—which makes the payments firm the sole provider for hundreds of millions of e-commerce shoppers purchasing office chairs, stationary bikes, and flat-screen TVs in monthly installments—but after the deal’s numbers were crunched into the 2022 fiscal year forecast, it all worked out to a modest 5% bump in projected revenue.
Analysts concur that it’s not a terrible report by any means, but stocks trade on expectations—and perhaps Twitter’s early start let investors’ hopes run a little too wild, taking Affirm’s share price for a ride along with it (trading was briefly halted for volatility late Thursday).
Whatever the cause, it’s been a costly day for founder Max Levchin, whose résumé includes PayPal, and who supposedly “felt great” about Affirm’s results on Thursday’s earnings call. Affirm has since lost over 60% of its market value from its peak last November.
Note: This story has been updated with additional context and to specify that a 5% bump in Affirm’s guidance was for projected revenue over the 2022 fiscal year.
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