I am selling the stock Affirm (AFRM). I had concerns going into the earnings report, when volume spiked negatively, with the stock trading at over twice its average daily volume and declining ahead of earnings. Today’s opening reinforces these concerns, as it suggests institutions are wary of something. It has me extremely cautious.
AFRM has a significant short position, and a downward trend in a favorable market environment is a red flag. Although the earnings report seemed positive, there’s clearly something institutions don’t like, as the selling pressure suggests.
While the long-term outlook for Buy Now, Pay Later (BNPL) companies is promising, the current selling indicates potential challenges in the near term. Taking money off the table now is better than risking a loss later.