Square's purchase of Afterpay is moving the entire fintech market
It seems like fintech stocks as a class are some of the biggest winners of the day. The big acquisition by Jack Dorsey and his fintech giant Square (NYSE:SQ) is catalyzing sympathy gains across the entire industry. So, what’s going on in this corner of the market today?
Well, most gains stem from yesterday’s deal between Square and fintech giant Afterpay (OTCMKTS:AFTPY). Dorsey’s fintech play is acquiring Afterpay in a $29 billion deal. The deal is yet another confirmation of the increasing popularity of “buy now, pay later” (BNPL) finance services. These services are becoming increasingly popular in the U.S. after finding popularity already in Europe. Particularly, they tap into a younger audience, who are typically much more skeptical of traditional lending services.
Fintech Stocks Move Up in Sympathy With Square Acquisition
Of course, both Square and Afterpay stocks are up on the news. Also, the acquisition is boosting other BNPL stocks as a result. Affirm (NASDAQ:AFRM) is gaining on the day’s session in sympathy, and many are turning to it as a discount play, as its price is much less than that of SQ stock. AFRM is being boosted by nearly 15% on the session.
Other fintech stocks outside of the BNPL space are also elevating today, with investors becoming bullish on fintech as a whole with the news and increasing popularity of the space. SoFi (NASDAQ:SOFI) stock is finishing the trading session on an uptick, gaining 2%.
Paysafe (NYSE:PSFE) is another stock gaining in sympathy. However, the company is also bulking itself up with news of its own. The company is announcing today that it’s acquiring a South American digital payment company called PagoEfectivo. The acquisition, alongside the sympathy gains from Square’s big news, is pushing PSFE stock up by about 3% on the day’s session.