Affirm Holdings Inc shares plummeted Thursday after the buy-now-pay-later fintech company announced plans to end its crypto program and cut its workforce by 19%.
In a letter to shareholders on Tuesday, CEO Max Levchin wrote, “In a period of increased economic uncertainty, we are doubling down on our core businesses, delaying projects with less certain revenue timelines, and aligning our operating expenses with revenue.”
That includes shutting down Affirm Crypto on March 31 and cutting about 500 employees.
Investors haven’t taken the news well, dropping Affirm’s share price about 20% to $12.81 Thursday morning.
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Affirm is a program that lets users buy products online but pay in smaller installments over time. The company launched its crypto program in 2021.
Analysts at Wedbush aren’t bullish on the company either. The firm maintained its Underperform rating and $10 price target on the stock Thursday.
Adding insult to injury, the company also posted fiscal second quarter results that fell short of its own guidance as well as Street expectations. Gross merchandise volume was a record $5.7 billion in the quarter but missed guidance, and revenue came in at $400 million but fell short of the $415 million expected by analysts.
Affirm chief financial officer Michael Linford believes these moves will enable the company to right the ship.
“We have taken decisive actions to reduce expenses,” Linford said. “We believe our cost base is now appropriately sized to meet our profitability goals while still supporting our product roadmap and long-term growth ambitions.”
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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