2 FinTech Stocks Drop After Apple Pay Update

Apple is adding BNPL options to its Apple Pay service

Deputy Editor
Jun 7, 2022 at 10:36 AM
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Fintech stocks are taking a hit today, following news that Apple (AAPL) is adding “buy-now-pay-later” options to its Apple Pay service. Talk of looming regulatory measures are adding pressure as well, following the sector's relatively unchecked rapid growth over the last two years. At last glance, Affirm Holdings Inc (NASDAQ:AFRM) and Block Inc (NYSE:SQ), formerly known as Square, are coming off their session lows, but were last seen down down 1.6% and 0.7%, respectively. 

Both stocks are underperforming on the charts, with AFRM carrying a 77.5% year-to-date deficit, while SQ is down 49.1% in 2022. Struggling to bounce back from its May 12 record low of $13.64, Affirm stock has found a floor at the $20 level, and is now trading at $23.33. Block stock hit a two-year low of $65.10 on May 12, and has recently reclaimed support at the $80 level -- currently at $82.82. 

Meanwhile, there is plenty of short-covering potential. Short interest represents 11.9% of AFRM's available float, and 8.9% of SQ's. Should some of this pessimism start to unwind, the stocks could continue to bounce off their mid-May lows. 

Options may be a good way to go, as the pair have exceeded options traders' volatility expectations this year. This is per Affirm stock's Schaeffer's Volatility Scorecard (SVS) of of 92 out of 100, and Block stock's SVS of 87. 

 

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