Affirm Holdings Plunges After Retracting Earnings Highlight Tweet

In what some are now calling the biggest rug pull of the year, Affirm Holdings, Inc. (Nasdaq: AFRM) retracted today its tweet outlining positive highlights of its Q2 2022 financial results, failing to acknowledge its net losses.

Attributing the faux pas to human error, the firm explained that “a small portion” of the results were inadvertently shared. It has since then released its full financial results on Thursday.

While the now-deleted tweet did not contain incorrect information upon cross-checking with the firm’s full financial results, it failed to highlight the firm’s widened losses compared to the year-ago period.

Revenue for the quarter was at US$361.0 million, a 77% increase over fiscal Q2 2021’s US$204.0 million. However, the firm incurred operating expenses during the quarter of US$557.2 million–greater than its revenue and higher than its counterpart last year of US$230.8 million. This led the company to record an operating loss of US$196.2 million compared to last year’s loss of US$26.8 million.

“[Operating loss] includes an $82.0 million increase in stock-based compensation following the Company’s January 2021 initial public offering,” said the firm in its earnings release.

This further led the firm to end with a net loss of US$159.5 million compared to the previous year’s loss of US$26.6 million. This translates to US$0.57 loss per share, which is lower than the consensus estimate of US$0.44 loss per share.

After the firm tweeted the highlights of its earnings release on Thursday, the stock price rose as much as 12%, trading at US$83.57 at its highest. But after deleting the tweet and issuing the explanation, shares have quickly dropped by 21.42% on the day.

Many have expressed their disappointment on Twitter, with some bringing up Jim Cramer’s endorsement of the firm in October 2021.

Barclays analyst Ramsey El-Assal weighed in, saying the now-deleted tweet points to results “well in excess of Street expectations” and maintains an overweight rating and a US$105 price target for the firm.

The finance company announced that it will hold its Q2 2022 earnings webcast today.

Affirm Holdings last traded at US$58.68 on the Nasdaq, down 21.42% on the day.

Information for this briefing was found via Edgar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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