FinTech IPO index falls 3.2% | PYMNTS.com
An abbreviated holiday shopping timeline – a breather, and then it’s all over again.
For the FinTech IPO index, a loss of 3.2% was recorded for the week leading up to Thanksgiving, and the index is down 48% for the year.
Investors have had a chance to digest earnings, and given some of the notable declines seen in recent days, sentiment is decidedly negative. Earnings are a snapshot of a quarter, a point in time, but given the macro pressures in the housing markets, and even the lingering impact of the pandemic, traders are less than happy about what’s to come.
Blend was down 24%, continuing a downdraft in the wake of earnings earlier in the month. In that announcement, the company noted that mortgage income was down 27% year-over-year, and that mortgage origination volume was down 63% over the same period.
OneConnect fell 22.5%, where earlier in November the company had recorded a small turnover growth of around 0.4%. The company said in its release that “macro uncertainties and pandemic control measures continue to weigh on parts of the business this quarter, as evidenced by declining use or volume of transaction-based products, such as auto insurance products and lending products and delays in certain implementation projects.”
SoFi fell 15.7% on reports this week that four US senators addressed a letter to the company expressing concern about online personal finance companies and the online bank’s digital asset trading activities and asking if it was working to align them with American Banking Law.
SoFi, the lawmakers said, is now a bank holding company but operates a non-bank subsidiary that enables retail investors to buy and sell digital assets.
“We are concerned that SoFi’s continued illegal digital asset activities demonstrate a failure to take seriously its regulatory obligations and comply with its obligations,” said the letter, which was signed by Sens. Sherrod Brown, D-Ohio; Jack Reed, DR.I.; Chris Van Hollen, D-Md.; and Tina Smith, D-Minn.
Volatility is a constant
Volatility reigns then, where earnings continue to reverberate, and double-digit snapbacks and double-digit plunges in a week, or even a day, have become the norm.
dLocal is a case study here. The company’s shares tumbled more than 50% earlier in November before skyrocketing by around 32.9% this week, all on the heels of news, as reported by PYMNTS, that Muddy Waters Capital had unveiled a short position in dLocal.
In the report released on Wednesday (November 16), Muddy Waters Capital said dLocal had reported growth and profitability that make it an “outlier”.
“The report contains numerous inaccurate statements, baseless claims and speculation,” dLocal said in the release responding to the report. “Short seller reports are often designed to drive the stock price down to serve the short seller’s interests to the detriment of the company’s shareholders. We caution shareholders against making investment decisions based on this report. dlocal will refute the claims in the relevant forum in due course.”
The short seller’s report debuted just days after dLocal reported a 51% increase in total payment volume in the most recent quarter.
Futu rallied 11%, after reporting earnings this week that, across the digital brokerage and wealth management platform, saw total users of moomoo and sister brand Futubull grow 15.6% year-on-year to 19.2 million. The total number of paying customers increased by 23.8% year-on-year to 1.5 million.
How consumers pay online with stored credentials
Convenience prompts some consumers to store their payment information with merchants, while security concerns give other customers pause. For “How We Pay Digitally: Stored Credentials Edition,” a collaboration with Amazon Web Services, PYMNTS surveyed 2,102 U.S. consumers to analyze the consumer dilemma and reveal how merchants can win over holdouts.
