Retail Sales Data Helps Send FinTech IPO Index 3.5% Lower

Stocks, including those of the FinTech IPO Index, slumped as retail sales data disappointed.

As PYMNTS reported Thursday (Dec. 15), retail sales in November declined 0.6% over October’s levels.

Holiday spending has proven no panacea here, and other macro data points helped underscore the fact that inflation is not about to abate. Central banks, including the Federal Reserve and the ECB, boosted rates, with more increases likely to come on the horizon. The implication here is that the pressures that have been in place, and the headwinds to transactions and payments volumes will only become more pronounced.

Cautions About Consumer Spending

And to that end, the FinTech IPO Index sank 3.5% through the past five sessions. Names that are reliant on consumer sentiment, on the propensity to spend, or financing that spending over time, suffered the most.

There are other data points that consumers are finding it tougher to juggle the challenges of managing daily financial life. As PYMNTS/Lending Club data showed on Thursday, 57% of individuals who live paycheck to paycheck say that inflation has diminished their capacity to reach long-term financial goals. Those goals include saving for retirement and saving money.

Katapult sank 30.7% through the same five-day timeframe.

Paysafe followed close behind, losing 28.6% through the past five sessions. This week, the payments platform saw a reverse 12-for-1 stock split.

Separately, the company said this week that its cash arm, viafintech, has started a new partnership with the bank ING Germany. In terms of the mechanics of the deal, and per a press release, more than nine million ING customers can make cash deposits or withdrawals from their current account at participating retailers in that country.

Affirm lost 10.7% from the end of last week, and Bank of America downgraded the buy now, pay later (BNPL) firm’s shares from a “buy” rating to a “neutral” rating. The price target now stands at $13, where it had been $32, as noted by ETF Daily News.

Walmart plans to offer customers a BNPL option through the (Walmart-backed) FinTech venture ONE as soon as 2023. The installment payment option will join the checking accounts, savings accounts and debit cards already offered by ONE. Walmart already uses Affirm to offer BNPL to its consumers; it was unclear what impact the new BNPL plans might have on that relationship.

Bucking the downtrend, Blend was up 28.1%. The share price gains came during a week where Blend Labs Co-founder and Chairman Nima Ghamsari said in a blog post that he has sold some of his shares in the company. The sales, he said in the post, were undertaken in order to reduce the amount outstanding of a personal loan that were in turn secured by the executive’s stock holdings.

“In light of the declines in Blend’s stock price, I have sold some of my holdings in Blend shares and used the proceeds to reduce the outstanding amount under the loan, as required under the loan documentation,” he wrote.