🔮 Better than the Oracle? Our Fair Value found this +42% bagger 5 months before Buffett bought itRead More

Today’s sell-off in Block and other FinTech stocks viewed as 'overdone'

EditorHari Govind
Published 26/10/2023, 02:06 am
© Reuters.
PYPL
-
SQ
-
AFRM
-

US FinTech stocks declined Wednesday following a report overnight from European payment firm Worldline. Worldline issued guidance and warned of "macroeconomic deterioration" in places like Germany.

Shares of Worldline plunged following the disappointing guidance, falling 58%, and the negative sentiment impacted US companies like Block (NYSE:SQ), PayPal (NASDAQ:PYPL), and Affirm Holdings (NASDAQ:AFRM).

In the view of analysts at Mizuho Securities, the sympathy selloff in US stocks was “overdone.” They also think the warning contradicted comments from management at Visa (NYSE:V).

“Worldline's warning of a 'macroeconomic deterioration' in core geographies like Germany is hurting the entire FinTech sector pre-market. Key stocks like AFRM, SQ and PYPL are each trading down,” wrote the analysts.

The analysts added, “We view the worries as overblown for the following reasons: (1) Visa specifically did not call out a recession in its initial FY24 guide, which it provided yesterday. Plus, when asked about Europe, Visa's CEO mentioned ‘resiliency’ and feeling ‘good about what's happening’ in the EU ex. UK. (2) Stocks like AFRM and SQ have little to no exposure to Germany & Europe, which means the negative stock reactions are unmerited.”

Shares of Block traded lower by nearly 8% shortly after the warning from Worldline, PayPal was lower by about 5%, and Affirm was lower by 12%.

Overnight Affirm’s stock was downgraded from Neutral to Sell by analysts at Compass Point, and this may have also weighed on its shares Wednesday morning.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.