Latest news with #Levchin
Yahoo
16-05-2025
- Business
- Yahoo
Why Affirm Holdings (AFRM) Stock Crashed Yesterday
We recently compiled a list of the Traders Flee These 10 Stocks Today. In this article, we are going to take a look at where Affirm Holdings, Inc. (NASDAQ:AFRM) stands against other stocks that crashed yesterday. Wall Street's main indices ended mixed on Thursday as investors continued to digest a series of first-quarter earnings and key economic data. Among the three indices, only the Nasdaq registered losses, down 0.18 percent. In contrast, the Dow Jones grew by 0.65 percent while the S&P 500 rose by 0.41 percent. Meanwhile, 10 companies registered hefty losses during the session, battered by a flurry of negative news, missed estimates, and a weak outlook for the rest of the year. In this article, let us explore the 10 companies that lag in performance and identify the reasons behind their decline. To come up with the list, we considered only the stocks with a $2 billion market capitalization and $5 million in trading volume. An entrepreneur launching her new brand on the company's platform, looking confident and joyful. Affirm Holdings snapped a three-day winning streak on Thursday, losing 8.49 percent to close at $51.75 apiece, as investor sentiment was dampened by a weak outlook for the rest of the year. According to Affirm Holdings, Inc. (NASDAQ:AFRM) CEO Max Levchin, its business from 0 percent APR installments generates lower revenues than its other products. 'We continued to lean into 0 percent APR monthly installments, which grew 44 percent year over year, and constituted 13 percent of total GMV, the highest level in the past two years," Levchin said. "While the revenue and RLTC (revenue less transaction costs) content in such transactions is marginally lower compared to interest-bearing loans, they attract higher credit quality consumers to Affirm, drive outsized point of sale conversion for merchants, and build our brand equity,' he added. Looking ahead, Affirm Holdings, Inc. (NASDAQ:AFRM) expects full-year revenues to increase to between $3.163 billion and $3.193 billion, up from its earlier outlook of $3.13 billion to $3.19 billion previously. Overall, AFRM ranks 6th on our list of stocks that traders flee today. While we acknowledge the potential of AFRM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AFRM but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: and . Disclosure: None. This article is originally published at . Sign in to access your portfolio
Business Mayor
11-05-2025
- Business
- Business Mayor
Affirm shares drop 13% on weak forecast, concerns over CEO's bet on 0% loans
Max Levchin, co-founder of PayPal and chief executive officer of financial technology company Affirm, arrives at the Sun Valley Resort for the annual Allen & Company Sun Valley Conference, in Sun Valley, Idaho. Drew Angerer | Getty Images Affirm shares plunged on Friday after the fintech company issued a weak forecast, and investors questioned CEO Max Levchin's plan to go big in 0% loans. The buy now, pay later lender said revenue this quarter will be between $815 million and $845 million. The midpoint of the range was short of the $841 million average analyst estimate, according to LSEG. Levchin, who founded the company in 2012, is trying to bolster growth with 0% loans, a strategy he says gets consumers in the door and potentially turns them into long-time customers. Levchin told CNBC's 'Squawk Box' that it's a way to build customer loyalty, even if it means sacrificing margins today. 'We are helping people understand that not paying interest, revolving interest, excessively is a good thing,' he said. 'We're taking share from credit cards.' Those loans now make up 13% of Affirm's total Gross Merchandise Volume (GMV), with 80% coming from prime and super-prime customers. Affirm's core business involves issuing point-of-sale installment loans to consumers buying items like apparel, electronics and sporting goods. While GMV topped analysts' estimates, Affirm's revenue less transaction costs (RLTC) missed the Street's expectations, in part due to the surge in 0% APR loans. For the quarter, the company beat on earnings and delivered revenue that was inline with estimates. Analysts at Citizens maintained their market outperform rating on the stock, but noted in a report that the increase in 0% loans 'led to a lower take rate and RLTC margin than most forecasts.' And analysts at BTIG, who have a buy rating on the stock, wrote that 'Affirm shares are down precisely because the RLTC/take-rate weakness wasn't offset by more rapid GMV growth.' Levchin said that despite economic uncertainty, consumers are continuing to spend and that Affirm's credit performance remains 'solid' and 'consistent.' 'People are stressed out about the economy, yet they're shopping, they're buying, and they're paying their bills — at least they're paying their bills back to us on time,' he said. With Friday's slide, Affirm shares are down about 22% for the year, while the Nasdaq is off about 7%. Some analysts remain bullish. Susquehanna, Bank of America , and TD Cowen all upgraded the stock or raised price targets due to what they see as growth potential. Goldman Sachs maintained a buy rating on Affirm, calling it a 'strong category leader in BNPL and a share gainer vs. legacy credit providers.' Barclays , which has the equivalent of a buy rating, called the quarter a 'solid print' despite high investor expectations. The firm cautioned that the stock could see short-term underperformance, but is bullish on new partnerships, like a recent agreement with Costco. Levchin emphasized the importance of playing the long game. 'It took consumers and merchants and sort of the universe about a decade to figure out what we are and just how different and important what we have found to work really is,' he told CNBC. WATCH: Affirm Holdings falls more than 10% despite surprise beat READ SOURCE
CNBC
09-05-2025
- Business
- CNBC
Affirm shares drop 13% on weak forecast, concerns over CEO's bet on 0% loans
Affirm shares plunged on Friday after the fintech company issued a weak forecast, and investors questioned CEO Max Levchin's plan to go big in 0% loans. The buy now, pay later lender said revenue this quarter will be between $815 million and $845 million. The midpoint of the range was short of the $841 million average analyst estimate, according to LSEG. Levchin, who founded the company in 2012, is trying to bolster growth with 0% loans, a strategy he says gets consumers in the door and potentially turns them into long-time customers. Levchin told CNBC's "Squawk Box" that it's a way to build customer loyalty, even if it means sacrificing margins today. "We are helping people understand that not paying interest, revolving interest, excessively is a good thing," he said. "We're taking share from credit cards." Those loans now make up 13% of Affirm's total Gross Merchandise Volume (GMV), with 80% coming from prime and super-prime customers. Affirm's core business involves issuing point-of-sale installment loans to consumers buying items like apparel, electronics and sporting goods. While GMV topped analysts' estimates, Affirm's revenue less transaction costs (RLTC) missed the Street's expectations, in part due to the surge in 0% APR loans. For the quarter, the company beat on earnings and delivered revenue that was inline with estimates. Levchin said that despite economic uncertainty, consumers are continuing to spend and that Affirm's credit performance remains "solid" and "consistent." "People are stressed out about the economy, yet they're shopping, they're buying, and they're paying their bills — at least they're paying their bills back to us on time," he said. With Friday's slide, Affirm shares are down about 22% for the year, while the Nasdaq is off about 7%. Some analysts remain bullish. Susquehanna, Bank of America, and TD Cowen all upgraded the stock or raised price targets due to what they see as growth potential. This self-driving car technology stock could pop by more than 400%, say three analysts Looking for alternatives to Nvidia? Futurum CEO names 3 he's bullish on for 2024 Bernstein tech analyst's best idea for 2024 is to short Tesla Morgan Stanley picks 'alpha' opportunities in China tech - giving one 52% upside Goldman Sachs maintained a buy rating on Affirm, calling it a "strong category leader in BNPL and a share gainer vs. legacy credit providers." Barclays, which has the equivalent of a buy rating, called the quarter a "solid print" despite high investor expectations. The firm cautioned that the stock could see short-term underperformance, but is bullish on new partnerships, like a recent agreement with Costco. Levchin emphasized the importance of playing the long game. "It took consumers and merchants and sort of the universe about a decade to figure out what we are and just how different and important what we have found to work really is," he told CNBC.
WIRED
29-04-2025
- Business
- WIRED
AI Is Using Your Likes to Get Inside Your Head
By Martin Reeves and Bob Goodson Apr 29, 2025 7:00 AM Liking features on social media can provide troves of data about human behavior to AI models. But as AI gets smarter, will it be able to know users' preferences before they do? Photo-Illustration:What is the future of the like button in the age of artificial intelligence? Max Levchin—the PayPal cofounder and Affirm CEO—sees a new and hugely valuable role for liking data to train AI to arrive at conclusions more in line with those a human decisionmaker would make. It's a well-known quandary in machine learning that a computer presented with a clear reward function will engage in relentless reinforcement learning to improve its performance and maximize that reward—but that this optimization path often leads AI systems to very different outcomes than would result from humans exercising human judgment. To introduce a corrective force, AI developers frequently use what is called reinforcement learning from human feedback (RLHF). Essentially they are putting a human thumb on the scale as the computer arrives at its model by training it on data reflecting real people's actual preferences. But where does that human preference data come from, and how much of it is needed for the input to be valid? So far, this has been the problem with RLHF: It's a costly method if it requires hiring human supervisors and annotators to enter feedback. And this is the problem that Levchin thinks could be solved by the like button. He views the accumulated resource that today sits in Facebook's hands as a godsend to any developer wanting to train an intelligent agent on human preference data. And how big a deal is that? 'I would argue that one of the most valuable things Facebook owns is that mountain of liking data,' Levchin told us. Indeed, at this inflection point in the development of artificial intelligence, having access to 'what content is liked by humans, to use for training of AI models, is probably one of the singularly most valuable things on the internet.' While Levchin envisions AI learning from human preferences through the like button, AI is already changing the way these preferences are shaped in the first place. In fact, social media platforms are actively using AI not just to analyze likes, but to predict them—potentially rendering the button itself obsolete. Buy This Book At: If you buy something using links in our stories, we may earn a commission. This helps support our journalism. Learn more. This was a striking observation for us because, as we talked to most people, the predictions mostly came from another angle, describing not how the like button would affect the performance of AI but how AI would change the world of the like button. Already, we heard, AI is being applied to improve social media algorithms. Early in 2024, for example, Facebook experimented with using AI to redesign the algorithm that recommends Reels videos to users. Could it come up with a better weighting of variables to predict which video a user would most like to watch next? The result of this early test showed that it could: Applying AI to the task paid off in longer watch times—the performance metric Facebook was hoping to boost. When we asked YouTube cofounder Steve Chen what the future holds for the like button, he said, 'I sometimes wonder whether the like button will be needed when AI is sophisticated enough to tell the algorithm with 100 percent accuracy what you want to watch next based on the viewing and sharing patterns themselves. Up until now, the like button has been the simplest way for content platforms to do that, but the end goal is to make it as easy and accurate as possible with whatever data is available.' He went on to point out, however, that one reason the like button may always be needed is to handle sharp or temporary changes in viewing needs because of life events or situations. 'There are days when I wanna be watching content that's a little bit more relevant to, say, my kids,' he said. Chen also explained that the like button may have longevity because of its role in attracting advertisers—the other key group alongside the viewers and creators—because the like acts as the simplest possible hinge to connect those three groups. With one tap, a viewer simultaneously conveys appreciation and feedback directly to the content provider and evidence of engagement and preference to the advertiser. Another major impact of AI will be its increasing use to generate the content itself that is subject to people's emotional responses. Already, growing amounts of the content—both text and images—being liked by social media users are AI generated. One wonders if the original purpose of the like button—to motivate more users to generate content—will even remain relevant. Would the platforms be just as successful on their own terms if their human users ceased to make the posts at all? This question, of course, raises the problem of authenticity. During the 2024 Super Bowl halftime show, singer Alicia Keys hit a sour note that was noticed by every attentive listener tuned in to the live event. Yet when the recording of her performance was uploaded to YouTube shortly afterward, that flub had been seamlessly corrected, with no notification that the video had been altered. It's a minor thing (and good for Keys for doing the performance live in the first place), but the sneaky correction raised eyebrows nonetheless. Ironically, she was singing 'If I Ain't Got You'—and her fans ended up getting something slightly different from her. If AI can subtly refine entertainment content, it can also be weaponized for more deceptive purposes. The same technology that can fix a musical note can just as easily clone a voice, leading to far more serious consequences. More chilling is the trend that the US Federal Communications Commission (FCC) and its equivalents elsewhere have recently cracked down on: uses of AI to 'clone' an individual's voice and effectively put words in their mouth. It sounds like them speaking, but it may not be them—it could be an impostor trying to trick that person's grandfather into paying a ransom or trying to conduct a financial transaction in their name. In January 2024, after an incident of robocalls spoofing President Joe Biden's voice, the FCC issued clear guidance that such impersonation is illegal under the provisions of the Telephone Consumer Protection Act, and warned consumers to be careful. 'AI-generated voice cloning and images are already sowing confusion by tricking consumers into thinking scams and frauds are legitimate,' said FCC chair Jessica Rosenworcel. 'No matter what celebrity or politician you favor, or what your relationship is with your kin when they call for help, it is possible we could all be a target of these faked calls.' Short of fraudulent pretense like this, an AI-filled future of social media might well be populated by seemingly real people who are purely computer-generated. Such virtual concoctions are infiltrating the community of online influencers and gaining legions of fans on social media platforms. 'Aitana Lopez,' for example, regularly posts glimpses of her enviable life as a beautiful Spanish musician and fashionista. When we last checked, her Instagram account was up to 310,000 followers, and she was shilling for hair-care and clothing brands, including Victoria's Secret, at a cost of some $1,000 per post. But someone else must be spending her hard-earned money, because Aitana doesn't really need clothes or food or a place to live. She is the programmed creation of an ad agency—one that started out connecting brands with real human influencers but found that the humans were not always so easy to manage. With AI-driven influencers and bots engaging with each other at unprecedented speed, the very fabric of online engagement may be shifting. If likes are no longer coming from real people, and content is no longer created by them, what does that mean for the future of the like economy? In a scenario that not only echoes but goes beyond the premise of the 2013 film Her , you can also now buy a subscription that enables you to chat to your heart's content with an on-screen 'girlfriend.' CarynAI is an AI clone of a real-life online influencer, Caryn Marjorie, who had already gained over a million followers on Snapchat when she decided to team up with an AI company and develop a chatbot. Those who would like to engage in one-to-one conversation with the virtual Caryn pay a dollar per minute, and the chatbot's conversation is generated by OpenAI's GPT-4 software, as trained on an archive of content Marjorie had previously published on YouTube. We can imagine a scenario in which a large proportion of likes are not awarded to human-created content—and not granted by actual people, either. We could have a digital world overrun by synthesized creators and consumers interacting at lightning speed with each other. Surely if this comes to pass, even in part, there will be new problems to be solved, relating to our needs to know who really is who (or what), and when a seemingly popular post is really worth checking out. Do we want a future in which our true likes (and everyone else's) are more transparent and unconcealable? Or do we want to retain (for ourselves but also for others) the ability to dissemble? It seems plausible that we will see new tools developed to provide more transparency and assurance as to whether a like is attached to a real person or just a realistic bot. Different platforms might apply such tools to different degrees. Excerpt adapted from Like: The Button That Changed the World by Martin Reeves and Bob Goodson. Published by arrangement with HBR Press. Copyright © 2025 by Martin Reeves and Bob Goodson.
Yahoo
22-04-2025
- Business
- Yahoo
Affirm joins Musk-fueled Delaware exit
Affirm, the fintech giant controlled by Paypal Max Levchin, plans to move its legal home out of Delaware, joining in the Elon Musk-inspired protest movement against America's longtime corporate home. The company is preparing to reincorporate in Nevada or Texas, according to people familiar with the matter. Affirm joins a growing list of companies quitting Delaware in a rebuke to legacy institutions they see as beholden to liberal forces. Levchin worked at PayPal with Musk, who set off the #Dexit push when he moved Tesla to Texas last year in protest after a Delaware judge nixed his $56 billion bonus. DropBox, Roblox, Bill Ackman's investment fund Pershing Square, AMC Networks, and Madison Square Garden Entertainment are all in the process of reincorporating in Nevada, which offers insiders more immunity from lawsuits and wider discretion in day-to-day management. MercadoLibre, another fintech giant, is reincorporating in Texas, and Meta flirted with doing the same but left the matter off its corporate ballot filed publicly last week. Walmart, which Semafor reported was considering a move, hasn't yet finalized its 2025 ballot. 'At this point, any lawyer recommending incorporation in Delaware is committing malpractice,' Musk posted on X last week. Affirm's move would need shareholder approval, but Levchin controls almost half of the company's votes through special stock. Another 18% of the vote is in the hands of Shopify, which invested in Affirm in 2020. An Affirm spokesman declined to comment. Delaware in response made significant changes to its corporate law that expands deference to CEOs and large stockholders. The state relies on company fees and related activities to fund for one-third of its budget. 'Everybody hates Duke basketball. Why? Because they always win,' Delaware Gov. Matt Meyer told Semafor in an interview earlier this month. 'Delaware is always winning the corporate franchise… There are 49 other states who look at our corporate revenues, and say, 'Wait a second, how do we grab some of that?'' Levchin, Musk, Peter Thiel, and Sequoia's Roelof Botha are among the members of 'Paypal Mafia,' a group of technologists who have gone on to achieve great success since leaving the payments company they launched in the late 1990s. 'These friendships are deeper than business and politics,' Levchin told Semafor's Andrew Edgecliffe-Johnson in an interview earlier this year. 'I consider Elon a friend and Peter a friend, and David [Sacks] a friend.' The companies that led the charge out of Delaware have mostly been tech firms controlled by insiders like Roblox's David Baszucki, but that's starting to change. MercadoLibre, which does not have a dominant stockholder, will provide a test of how money managers like BlackRock and Vanguard feel about the exodus from Delaware. Fidelity National Financial, a service provider to the mortgage industry, is similarly seeking shareholder approval to reincorporate in Nevada after an identical proposal failed to gain majority support last year.'Delaware has squandered its inheritance' by allowing litigants to 'second-guess' corporate decisionmaking, Texas Governor Greg Abbott wrote in a Journal op-ed last month. Some corporates in Canada are facing shareholder criticism for redomiciling out of the Great White North to the US.
