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Baillie Gifford Just Doubled Down on Affirm (AFRM) Stock

  • Baillie Gifford has increased its existing Affirm (AFRM) position by 42%.
  • The buy now, pay later (BNPL) company will report earnings on Aug. 25.
  • Shares of AFRM stock are down over 65% year-to-date.
AFRM stock - Baillie Gifford Just Doubled Down on Affirm (AFRM) Stock

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Affirm (NASDAQ:AFRM) stock is in full focus following a significant purchase by Baillie Gifford. Meanwhile, Affirm has confirmed that it will report earnings on Aug. 25 after the market close. Analysts are expecting an earnings per share loss of 59 cents and revenue of $354.8 million.

Baillie Gifford operates as an investment management firm in the United Kingdom with over $142 billion in managed 13F securities. The firm has a reputable track record of outperformance and operates as a long-term investor. Stocks in its portfolio are held for an average of 11.8 quarters, or just under three years. Currently, the top three stocks in Baillie’s 13F portfolio are Tesla (NASDAQ:TSLA), Moderna (NASDAQ:MRNA), and Illumina (NASDAQ:ILMN)

With that in mind, let’s take a look at the firm’s AFRM stock purchase.

AFRM Stock: Baillie Gifford Purchases 6.83 Million Shares

According to an amended 13G form received by the Securities and Exchange Commission (SEC) today, Baillie purchased an additional 6.83 million shares of AFRM. This purchase increased the firm’s existing stake by 42%.

After the purchase, Baillie now owns a total of 23.14 million shares, equivalent to a 10.23% ownership stake. In addition, Baillie can now be classified as a company insider since it owns a greater than 10% stake.

So, why exactly did the firm make this purchase? Since the beginning of the year, shares of AFRM have fallen lower by over 60%. As inflation rises, consumers are less willing to purchase items using buy now, pay later (BNPL) services. It’s also interesting that Baillie chose to increase its stake just a few weeks before earnings. Ultimately, the firm may see an attractive discount opportunity with a catalyst looming nearby.

Who Else Is Betting Big on Affirm?

Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. During the first quarter, 373 funds reported owning AFRM, a significant decline of 50 funds from the previous quarter. In addition, the institutional put/call ratio lies at 1.21. This means that more funds own put options against the company than call options. Let’s take a look at the top five shareholders:

  1. Capital Research Global Investors: 30.86 million shares.
  2. Max Levchin, Founder and CEO: 29.09 million shares. Levchin’s position is accurate as of Q4 of 2021.
  3. GIC Private: 27.32 million shares.
  4. Baillie Gifford: 23.14 million shares.
  5. Shopify (NYSE:SHOP): 20.29 million shares. Shopify’s position is accurate as of Q4 of 2021.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.


Article printed from InvestorPlace Media, https://investorplace.com/2022/08/baillie-gifford-just-doubled-down-on-affirm-afrm-stock/.

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