Title: Affirm (AFRM) Shares Surge 13% on Walmart Integration News
Shares of Affirm (AFRM) soared as much as 13% on Tuesday morning following the announcement that the company’s buy now, pay later features would be integrated into self-checkout lines at Walmart (WMT), a move that is seen as an incremental product update on a solution already offered to the vast majority of Walmart shoppers.
Shoppers can already use Affirm to spread out payments for goods purchased on walmart.com, at the company’s auto centers, its vision centers, and in regular checkout lines with a cashier. The partnership between Affirm and Walmart has already been driving business outcomes such as increased sales and customer growth, demonstrated by a 40% increase in utilization of buy now, pay later offerings on Cyber Monday, according to Adobe Analytics.
However, the surge in Affirm’s stock price highlights the challenges faced by investors, with around 21% of Affirm’s float being sold short, meaning short sellers have piled up bets the stock will fall.
The stock had experienced a significant decline, falling more than 90% from its late 2021 highs to its lows earlier this year, as traders anticipated negative impacts from higher rates and fears of a consumer slowdown.
Yet, recent market and economic changes have seen a reversal of fortunes for Affirm, with the stock gaining 180% since November 1 and nearly 500% year-to-date. It is evident that traders who were bearish on the stock have been squeezed out of their positions as market conditions for buy now, pay later companies like Affirm have improved.
The significant impact of product updates on the stock price, combined with heavy short selling, suggests that market dynamics are rapidly changing. While the focus is on Affirm, these shifts have wider implications across sectors, styles, and sizes, showcasing the volatile nature of the market.