SQ - AFRM Stock: One Big Reason Affirm Is Collecting Cash Today
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2021 is seeing a rise in all sorts of new payment methods and systems. From buying cryptocurrency through Venmo, to paying with Litecoin (CCC:LTC-USD) through PayPal (NASDAQ:PYPL), new ways to buy range from novelty to legitimately helpful. “Buy now, pay later” (BNPL) services are seemingly the latter; consumers are responding incredibly well to what are essentially installment loans on retail goods. And with a huge merger between one BNPL service and Square (NYSE:SQ), investors are seeking out value plays in the new space. Affirm (NASDAQ:AFRM) is looking like just that, and AFRM stock is benefiting today as a result.
Afterpay (OTCMKTS:AFTPY) is an Australian fintech company that is one of the earliest and largest companies in the BNPL space. This morning, Jack Dorsey’s Square is announcing a $29 billion purchase of Afterpay. Dorsey says the service and his company share a similar vision of making finance “more accessible, fair and inclusive.”
He’s not wrong, either. BNPL services are booming, especially among younger people who, according to MarketWatch, seek out these services due in large part to skepticism toward traditional financial services. This boom is prompting the inception of many competitors within this space, including Swedish BNPL player Klarna.
AFRM Stock Booms as Investors Seek Out Value BNPL Plays
SQ stock is selling for north of $275 on the heels of the Afterpay acquisition news. That’s a hefty buy-in for investors looking to capitalize on the BNPL trend. Hence, many are looking for discount plays. AFRM stock is presenting just that.
Affirm is a U.S.-based service, representing one of the most popular installment-payment brokers in the space right now. The company counts Peloton (NASDAQ:PTON) among its clients, and it continues to expand; in fact, the company recently partnered with Shopify (NYSE:SHOP) to exclusively power installment-based payments on its web stores.
Affirm’s aggressive moves and affordable price are making it one of the most appealing BNPL brands from an investor perspective. Today, as the Square and Afterpay deal takes over the newsfeed, AFRM stock is seeing gains of more than 15%.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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