Affirm Earnings Blunder - AFRM “Accidentally” Releases Earnings 2 Hrs Early with a Tweet

AFRM was planning to release earnings at 4:00 PM On Feb 10, 2022 – after market close. They accidentally sent out a tweet summarizing their earnings, 2 hours early. This was picked up on Twitter and the markets started to freak out. I’ve outlined what happened in the following timeline – note all times are in EST 1:47 PM – AFRM “accidentally” tweets out earnings results and then deletes the tweet. There were a few accounts on twitter that caught this mistake and started to share it – one of the larger accounts being Stock Market News – here is a link to the tweet. Leading up to this time it was relatively quiet across social media as people were waiting for the earnings after market close. At this point in time AFRM was trading at about $80 per share and started to become more volatile based on the tweet starting to be shared across Twitter. “$AFRM when you write the perfect scheduled tweet and accidentally just send it 💀” To give you a bit of perspective of how significant this mistake was, here is a breakdown of how quickly it started to circulate across twitter for the next 30 minutes Number of tweets increased 580%, number of likes increased 211% and number of impressions (how many people see a tweet mentioning AFRM) increase a whopping 842%. 32 million people saw a tweet related to AFRM in this short span of time. This will all picked up on the Utradea Social Sentiment Dashboard For the next little while there seems to be a mix of Calls and Puts being purchased, and the flow looked a bit more active. The price moves between $82 and $77 per share. The market was still trying to make sense of the accidental tweet 2:45 PM – AFRM Share Price Starts to drop of the cliff Around this time AFRM is trading $82 per share, and then a few minutes later we see it nosedive to $51 per share in a mater of minutes. Trading was halted for a few minutes over this time period, but the stock continued to fall. Once trading resumed, we started to see the price bounce back up as high as $65 a share. At this point the damage was done. The tweet wiped out close to 25% of the share price and approximately $5 Billon in market cap. 3:20 PM – AFRM tweets out actual earnings release Here is a quote of their tweet “Due to human error, a small portion of Affirm’s fiscal Q2 results were inadvertently tweeted from Affirm’s official Twitter account earlier today.” Below I’ve highlighted a few bullets from their official earnings release. Second Quarter of Fiscal Year 2022 Operating Highlights: Gross merchandise volume ("GMV") for the second quarter of fiscal 2022 was $4.5 billion, an increase of 115%. Excluding the impact from the completion of the initial rollout of Affirm's interest-bearing solution with Amazon in November, GMV doubled. Active merchants increased from 8,000 to 168,000, driven primarily by the adoption of Shop Pay Installments by merchants on Shopify's platform. Active consumers grew 150% to 11.2 million and increased by 2.5 million, or 29%, compared to the period ended September 30, 2021. Transactions per active consumer increased 15% to 2.5 as of December 31, 2021. Looking at these results you’d be happy as an AFRM investor – they performed extremely well in the last quarter. Unfortunately, the damage is done – at market close the shares were trading at $60. Here are some of the tweets in response to AFRM earnings blunder “I expect to be fully compensated. I’ve contacted your IR team. This is not acceptable” “Wtf. Lost over 50k because of this mistake. Entire plan was to expect earnings after hours not during” “This “human error” cost me a ton of money.  Good earnings overall but this screw up cost me big.  Stock dropped and was manipulated down.  Options flow was super bullish on this.” Closing Thoughts on AFRM Earnings Blunder First, the power of social media in the stock market, especially Twitter. Whether it as an accident or not, Affirm dropping this news on Twitter will get picked up almost instantly. Even if it is deleted. Twitter is truly one of the best sources for real-time stock market information. AFRM would be more than aware of this. As an investor, you should have an active pulse on what is trending on Twitter. Secondly, I think we will see an investigation into what happened with the early tweet. It could have been an honest mistake, but you can look at put options that were purchased ahead of time an see who stood to gain from a significant drop in price. I will be watching this closely over the next little while.

Affirm Earnings Blunder - AFRM “Accidentally” Releases Earnings 2 Hrs Early with a Tweet

George Lucas

4:29 PM

Newsletter

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Image credit: Affirm Earnings Blunder - AFRM “Accidentally” Releases Earnings 2 Hrs Early with a Tweet - utradea

AFRM was planning to release earnings at 4:00 PM On Feb 10, 2022 - after market close. They accidentally sent out a tweet summarizing their earnings, 2 hours early.

This was picked up on Twitter and the markets started to freak out. I've outlined what happened in the following timeline - note all times are in EST

1:47 PM - AFRM “accidentally” tweets out earnings results and then deletes the tweet.

There were a few accounts on twitter that caught this mistake and started to share it - one of the larger accounts being Stock Market News - here is a link to the tweet. Leading up to this time it was relatively quiet across social media as people were waiting for the earnings after market close. At this point in time AFRM was trading at about $80 per share and started to become more volatile based on the tweet starting to be shared across Twitter.

“$AFRM when you write the perfect scheduled tweet and accidentally just send it 💀”

To give you a bit of perspective of how significant this mistake was, here is a breakdown of how quickly it started to circulate across twitter for the next 30 minutes

Number of tweets increased 580%, number of likes increased 211% and number of impressions (how many people see a tweet mentioning AFRM) increase a whopping 842%. 32 million people saw a tweet related to AFRM in this short span of time. This will all picked up on the Utradea Social Sentiment Dashboard

For the next little while there seems to be a mix of Calls and Puts being purchased, and the flow looked a bit more active. The price moves between $82 and $77 per share. The market was still trying to make sense of the accidental tweet

2:45 PM - AFRM Share Price Starts to drop of the cliff

Around this time AFRM is trading $82 per share, and then a few minutes later we see it nosedive to $51 per share in a mater of minutes. Trading was halted for a few minutes over this time period, but the stock continued to fall. Once trading resumed, we started to see the price bounce back up as high as $65 a share.

At this point the damage was done. The tweet wiped out close to 25% of the share price and approximately $5 Billon in market cap.

3:20 PM - AFRM tweets out actual earnings release

Here is a quote of their tweet “Due to human error, a small portion of Affirm's fiscal Q2 results were inadvertently tweeted from Affirm's official Twitter account earlier today.”

Below I've highlighted a few bullets from their official earnings release.

Second Quarter of Fiscal Year 2022 Operating Highlights:

  • Gross merchandise volume ("GMV") for the second quarter of fiscal 2022 was $4.5 billion, an increase of 115%. Excluding the impact from the completion of the initial rollout of Affirm's interest-bearing solution with Amazon in November, GMV doubled.
  • Active merchants increased from 8,000 to 168,000, driven primarily by the adoption of Shop Pay Installments by merchants on Shopify's platform.
  • Active consumers grew 150% to 11.2 million and increased by 2.5 million, or 29%, compared to the period ended September 30, 2021.
  • Transactions per active consumer increased 15% to 2.5 as of December 31, 2021.

Looking at these results you'd be happy as an AFRM investor - they performed extremely well in the last quarter.

Unfortunately, the damage is done - at market close the shares were trading at $60. Here are some of the tweets in response to AFRM earnings blunder

“I expect to be fully compensated. I've contacted your IR team. This is not acceptable”

“Wtf. Lost over 50k because of this mistake. Entire plan was to expect earnings after hours not during”

“This “human error” cost me a ton of money. Good earnings overall but this screw up cost me big. Stock dropped and was manipulated down. Options flow was super bullish on this.”

Closing Thoughts on AFRM Earnings Blunder

First, the power of social media in the stock market, especially Twitter. Whether it as an accident or not, Affirm dropping this news on Twitter will get picked up almost instantly. Even if it is deleted. Twitter is truly one of the best sources for real-time stock market information. AFRM would be more than aware of this. As an investor, you should have an active pulse on what is trending on Twitter.

Secondly, I think we will see an investigation into what happened with the early tweet. It could have been an honest mistake, but you can look at put options that were purchased ahead of time an see who stood to gain from a significant drop in price. I will be watching this closely over the next little while.