Shares of the buy now, pay later (BNPL) company Affirm (AFRM 9.47%) rose nearly 4% Tuesday for no obvious reason, although there are a few things that could have driven the move.
Earlier today, the e-commerce company BigCommerce (BIGC 7.11%) announced that it had expanded its partnership with Affirm to be BigCommerce's "pay-over-time solution partner." The multiyear deal will allow merchants on BigCommerce's platform to use Affirm's solutions at checkout and offer customers a range of options for how they pay off purchases.
"Affirm's scale and reliability, combined with the unparalleled flexibility and transparency they offer consumers, make them an obvious choice and great pay-over-time solution for our merchant network," Mark Rosales, vice president of payments at BigCommerce, said in a statement.
In other news, Affirm's CEO Max Levchin recently spoke to The Wall Street Journal about just how confident he is in the company and himself.
"I can swear on a stack of Bibles or your preferred book of choice, until we get through a full recession, I will get partial credit when I show the numbers that I said I will," Levchin said. "But once we're back in a rapidly expanding economy and we're still here, still lending money, still controlling our delinquencies, I think I'll get full recognition."
Having revolutionized the BNPL space, Affirm rose as high as $164 per share last November but has since come crashing down to below $40 per share, as investors have worried about how higher interest rates will impact the business.
There is no denying Levchin's ingenuity as the former co-founder of Paypal, but given what else has gone on in the fintech lending space, it's hard for me not to have concerns about the business right now.
Higher interest rates have likely led to loan funding issues at Affirm as the capital markets have dried up. Furthermore, higher rates could lead to more loan losses among Affirm's customer base. Perhaps Levchin is right, but given what's going on in the space right now I'd need to see the proof before buying in.