The defeat that tech stocks faced on Thursday captures all the pressure fintech IPO names are facing… and sums it up in a nutshell.
Economic data fueled fears of further rate hikes as US GDP rose 3.2% yoy in the third quarter. That report beat estimates of 2.9%, and with inflation remaining at elevated levels, the promise of rate hikes by the Federal Reserve well into 2023 seems safe.
The specter of continued rate hikes is fueling fears of headwinds for platforms and the digital-only upstarts promising to “renovate” industries like real estate and lending and retail that are, well, interest-rate sensitive.
One more week
What’s more, the fintech IPO in the last week of the year is down 3.7% over the past five sessions — and down more than 52% year-to-date. As for those price-sensitive names? Trade finance firm Triterras shed 28% for the week, and residential real estate-focused Opendoor was close behind, down 26%. Upstart gave up 16% over the same period as its model of originating and selling personal loans to investors may face some headwinds as those investors demand higher yields in a higher interest rate environment.
OppFi lost 7.7% in a week in which the consumer-lending-focused fintech closed a $150 million loan facility with a Castlelake subsidiary as the lender, the company said. The company said the facility will allow OppFi to fund growth in claims.
Nuvei slipped about 8%. As mentioned here late last week, Canada-based Nuvei and Holland Casino have expanded their partnership to bring instant payouts to Dutch players. Withdrawals are made possible by integrating SEPA Instant Credit Transfer into the cashier, and funds can be accessed instantly from user accounts.
Futu fell nearly 7% after proposing a secondary listing of its Class A shares on the Hong Kong Exchange.
And in a sign of what FinTechs may be in store – in an exit strategy that might become a consideration for struggling FinTech names – EQT Private Equity’s acquisition of Billtrust has been completed. The Go Private transaction means that the B2B order-to-cash software provider has stopped trading. The cash transaction values Billtrust’s equity at approximately $1.7 billion and comes a year after the company went public and began trading on the Nasdaq.
Losses in the above names swamped the few laggards who managed to make gains over the past five trading days.
Catapult up 1%. The company, which focuses on omnichannel retail, announced in a press release that it has partnered with iBUYPOWER, which makes powerful custom gaming PCs with flexible payment options.
The most notable gainer was dLocal, which rose 14%. Responding this week to claims made in a report by short seller Muddy Waters Capital last month, the company also said it has launched a share buyback program for up to $100 million of the company’s stock.
“We maintain separate bank accounts for dealer money and our own cash. We have not used cash from dealers to make loans to our executives or to pay dividends to our shareholders,” the company said. dLocal also said it has been consistent and transparent in how it calculates and reports its total payment volume and comparisons by cohort.
How consumers pay online with saved credentials
Convenience is prompting some consumers to store their payment information with merchants, while concerns about security are causing other customers to pause. For How We Pay Digitally: Stored Credentials Edition, a collaboration with Amazon Web Services, PYMNTS surveyed 2,102 US consumers to analyze the consumer dilemma and how merchants can overcome resistance.
See more in: Billtrust, dLocal, Special News, FinTech IPO Index, Futu, Investing, News, Nuvei, Opendoor, OppFi, Technology Stocks, Triterras
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