The stock market has seen a lot of declines in recent weeks, as major market benchmarks have hit levels not seen in more than a year. However, investors seem to have a bit more optimism coming into Friday's trading session. As of 7:30 a.m., futures on the Dow Jones Industrial Average (^DJI 0.40%) were up 229 points to 31,881. S&P 500 (^GSPC 1.02%) futures had gained 42 points to 3,969, while Nasdaq Composite (^IXIC 2.02%) futures had picked up 196 points to 12,143.
Much of Wall Street's attention Friday morning went to Elon Musk, whose $44 billion bid for Twitter (TWTR) appears to be in new jeopardy. However, in spending yet more time concentrating on the latest moves from the Tesla CEO, many investors are missing out on a big rebound in shares of one key fintech stock. Read on to learn more about both.
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A new wrinkle in the Twitter buyout
Shares of Twitter fell nearly 14% in premarket trading on Friday morning. The downward move came after Elon Musk ironically used Twitter to tell people that his proposed acquisition of the social media giant was "temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users."
Twitter had disclosed the 5% figure in its quarterly filing with the U.S. Securities and Exchange Commission (SEC) in early May, citing an internal review of a sample of accounts in making its estimate. However, even Twitter noted the potential for error in the methodology it used, citing "significant judgment" involved in making its estimates and therefore acknowledging that the true number could be higher.
Musk has said that fake accounts are a key target he's hoping to eliminate if he completes his proposed purchase of Twitter. One thing the Tesla CEO has proposed is to offer validated account status to anyone who can demonstrate being a human rather than a bot.
Although Twitter shares fell, Tesla got a 7% rebound on Friday morning, indicating the level of concern to which shareholders worried about Musk's distraction and the downward pressure from having to finance the deal. Musk hasn't shut the door on a deal permanently, but many following the saga have suspicions that Twitter won't end up in the Tesla CEO's hands after all.
An Affirm-ative move higher
Many investors caught up with Twitter failed to notice that Affirm Holdings (AFRM 5.31%) continued its sharp bounce on Friday morning. After moving up by 23% in Thursday's regular session, the buy now, pay later specialist got a 36% upward move following its latest financial report.
Affirm's results for its fiscal third-quarter ending March 31 included a number of encouraging figures. Gross merchandise volume over its network jumped 73% year over year to $3.9 billion. Affirm brought in 12,000 more active merchants, bringing its total count to 207,000. Active consumers, meanwhile, more than doubled to 12.7 million from 12 months ago, including a 1.5 million user increase in just the first three months of 2022. Transactions per consumer rose 19%, bringing total transaction counts to 10.5 million, up 162% from last year's quarter. Affirm's revenue rose 54% to nearly $355 million.
Perhaps more importantly, Affirm also announced Thursday that it would extend its partnership with e-commerce giant Shopify for several years. The agreement will ensure that Affirm is the exclusive provider of services for merchants wanting to offer their consumers the ability to pay over time via the Shop Pay Installments service.
Also, investors liked Affirm's guidance, which includes calls for revenue of $1.33 billion to $1.34 billion in fiscal 2022. After a big downward move in the stock price, the rebound shows that shareholders haven't given up on Affirm's long-term prospects.
