- Affirm Holdings traded 6% lower in Monday's premarket.
- AFRM stock down as Bloomberg reports the company has halted its bond sale.
- AFRM releases guidance for Q3 and full-year 2022.
Affirm Holdings (AFRM) is making news this morning as the stock slides up to 6% in premarket trading. The company is a Buy Now Pay Later lender that has been under pressure since reporting a poor set of results on February 10.
Affirm Stock News
Bloomberg reports this morning that Affirm's planned bond sale was halted when a major investor backed out of the deal. This was likely due to heightened volatility, according to Bloomberg. The investor was a major participant in the AAA-rated part of the bond deal, according to sources. The news set Affirm stock sharply lower in the premarket. Affirm did, however, release upgraded sales forecasts for the next quarter and the full year. Affirm has raised Q3 sales guidance from the prior range of $325-$335 million to $335 million-plus. It has also upgraded its full-year guidance. The prior range was between $1.29-$1.31 billion but now squarely at $1.31 billion.
The company said in its release this morning: "Affirm’s diversified funding strategy--which leverages multi-year committed warehouse credit facilities, forward-flow arrangements, and asset-backed securities (ABS) issuances – is designed to enable the company to fund its business efficiently and effectively, without reliance on any single funding channel. For example, in the current volatile market environment for pricing ABS issuances, the company’s diversified funding strategy allows it to maintain discipline by leveraging other sources of liquidity with attractive economics."
This is a tricky position for Affirm. In one sense the rising inflation and potential for a recession would heighten demand and consumer need for Buy Now Pay Later products. Relying on money and bond markets will become increasingly tricky, however, as the company has found out this morning.
Affirm Stock Forecast
This latest news just confirms the bearish trend and will see a record low for the stock. There is no support below as we are in uncharted territory. Breaking back above $43 would be the first resistance needed to end the current bearish trend. We do have a current bearish divergence from the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), so this is an interesting test. However, it looks like the trend is too overpowering.
AFRM chart, daily
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