US stocks have taken a hit after President Donald Trump announced sweeping tariffs, sending buy now, pay later (BNPL) companies like Affirm and Klarna reeling.
Affirm’s shares plummeted about 30% in two days following the announcement, marking their second-worst week on record. The company’s reliance on consumer spending makes it particularly vulnerable to economic shocks.
Rival Klarna also delayed its long-anticipated initial public offering (IPO) due to market volatility, citing concerns over consumer spending and credit. Affirm’s market cap has taken a hit, falling to $11 billion from $15 billion.
Ticketing marketplace StubHub and fintech firm Chime have also put their IPO plans on hold, raising questions about the health of the IPO market.
Analysts say BNPL companies are exposed to cyclical risk due to their reliance on consumer spending. With 42% of Affirm’s transactions in general merchandise, fashion, and travel sectors, which tend to be hit hardest during economic downturns, the company is particularly at risk.
“This is when you see a lot more weakness,” said Sanjay Sakhrani, senior analyst at KBW. “When you go down the spectrum, that’s when you have more cyclical risk and more exposure to tariffs.”
Source: https://www.cnbc.com/2025/04/04/affirm-second-worst-week-on-record-on-tariffs-klarna-delayed-ipo.html