Affirm Shares Drop 7% to 68th in U.S. Trading Activity Amid Rival Klarna's IPO Push

Affirm Holdings (AFRM) fell 7.05% on September 2, with a trading volume of $1.16 billion, a 70.8% drop from the previous day. The stock ranked 68th in trading activity among U.S. equities.

The decline followed Klarna’s announcement of its planned U.S. IPO, aiming to raise up to $1.27 billion by issuing over 34 million shares. As a key rival in the buy-now-pay-later sector, Klarna’s public market entry intensified competitive pressures, prompting investors to reassess Affirm’s valuation. Analysts noted that Affirm’s 40% year-to-date gain had already pushed its stock to relatively high valuations, making it vulnerable to such developments.

Despite the drop, Affirm’s recent momentum remains strong. The stock surged 12.7% four days prior after reporting robust Q2 results, including $876.4 million in revenue (a 33% YoY increase) and a GAAP profit of $0.20 per share, contrasting with a $0.14 loss in the same period last year. Management’s upbeat Q3 revenue forecast of $870 million further bolstered investor sentiment. At $82.20, the stock remains near its 52-week high of $88.46.

Backtest data shows a $1,000 investment in Affirm at its January 2021 IPO would now be worth $845.35. The stock has gained 31.5% this year, trading close to its peak. Investors are advised to consider broader market dynamics and competitive shifts when evaluating entry points.