Pomerantz LLP announces that a class action lawsuit has been filed against Affirm Holdings, Inc. ("Affirm" or the "Company") (NASDAQ: AFRM) and certain of its officers. The class action, filed in the United States District Court for the Northern District of California, and docketed under 22-cv-02099, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Affirm securities between February 12, 2021 and February 10, 2022, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased or otherwise acquired Affirm securities during the Class Period, you have until April 29, 2022 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
[Click here for information about joining the class action]
Affirm operates a platform for digital and mobile-first commerce in the U.S. and Canada. The Company's platform includes point-of-sale payment solutions for consumers, merchant commerce solutions, and a consumer-focused app. Particularly, Affirm offers a payment service known as "buy-now, pay-later" ("BNPL"), which allows consumers to purchase a product immediately and pay for it at a later time, usually over a series of installments. According to the Company, "[u]nlike legacy payment options and our competitors' product offerings, which charge deferred or compounding interest and unexpected costs, we disclose up-front to consumers exactly what they will oweâ??--â??no hidden fees, no penalties."
Affirm also maintains an official Twitter account, through which it publishes statements--or "tweets"--including periodic financial results.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Affirm's BNPL service facilitated excessive consumer debt, regulatory arbitrage, and data harvesting; (ii) the foregoing subjected Affirm to a heightened risk of regulatory scrutiny and enforcement action; (iii) Affirm maintained inadequate disclosure controls and procedures and internal control over financial reporting; (iv) accordingly, Affirm's tweet for its second quarter 2022 financial results contained selected metrics that made it appear that the Company had performed better than it actually did; and (v) as a result, the Company's public statements were materially false and misleading at all relevant times.
On December 16, 2021, the Consumer Financial Protection Bureau (the "CFPB") announced that it had launched an inquiry into Affirm's BNPL payment service, along with four other companies offering BNPL. The CFPB indicated that it was concerned about how BNPL leads to "accumulating debt, regulatory arbitrage, and data harvesting," and is seeking data on the risks and benefits of the products. In a statement addressing BNPL services, the CFPB Director stated, "[t]he consumer gets the product immediately but gets the debt immediately too."
On this news, Affirm's stock price fell $11.74 per share, or 10.58%, to close at $99.24 per share on December 16, 2021.
Then, at approximately 1:15 p.m. on February 10, 2022, Affirm issued a tweet from its official Twitter account, wherein the Company disclosed certain metrics from its second quarter 2022 financial results. The tweet, which was published prior to the Company's planned release of its financial results, portrayed a highly successful quarter, which included an increase in revenue of 77%. This caused Affirm's share price to spike nearly 10% in intra-day trading. The Company later deleted the tweet and released its full second quarter financial results ahead of schedule, which were lackluster, posting a loss of $0.57 per share, compared with analyst expectations of $0.37 per share.
On this news, Affirm's share price plummeted from an intra-day high of $83.57 per share on February 10, 2022, to close at $58.68 per share, or approximately 32%.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com
Robert S. Willoughby
888-476-6529 ext. 7980