Affirm thoughts & Walmart

I just wanted to share a few thoughts on a new position I’ve opened.

There have sensibly been some cautious posts on Affirm which I recommend everyone reading. However, I have opened a fairly large position recently after digesting all the great research on this board and elsewhere.

Yesterday there was some very positive news that Walmart is doing away with their layaway model and using Affirm going into the holiday season.…

The core area of Affirm that excites me is the disruption of the credit card industry and how they are using data/AI to do this. Similar to Upstart, they are using their superior AI to offer credit to the underbanked. They are making great moves to position themselves as the leader in the US, and we know what a big TAM they have taking on this global space. I also like how their revenue model focuses on both the merchant and the consumer, eschewing high interest rates and hidden fees that punish the consumer from legacy providers. The global payments report below states BNPL will grow 181%, from 1.6% of all e-commerce transactions in 2020 to 4.5% in 2024, I mean that is some serious industry tailwind growth.


Heading into e-commerce season
Travel is back, something that lends itself perfectly for BNPL and they have a lot of merchants lined up for this
Walmart deal above
Amazon deal coming online
Shopify deal early stages
Debit card roll out

I think we’re in the game of looking at the % chances that a company will outperform their current growth rates. If you look at CRWD, DDOG etc despite perpetual stellar performance, there is quite a low chance their revenue growth increases from here on out. I think based on the above tailwinds, Affirm has a great shot of delivering higher growth in the future so that’s where I want to place my money.

I will caveat this with the fact it comes with a lot of risk vs a lot Saul stocks so be careful.


Portfolio updates.…


Hi andrew thanks for the walmart/affirm deal news. This board appreciates numbers, so I will post a link to the latest financial report from Affirm Holdings, Inc.…

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Thanks for kicking off this thread. I have bought and sold Affirm twice this year and then bought again after Q2 earnings. I added more on the slight pullback this morning. Here’s my thinking:

1. We are coming into the biggest retail season of the year. Whatever lies further ahead, it seems impossible that the next few quarters aren’t very, very good for Affirm. I can’t imagine they aren’t doing all they can to get the integrations with Shopify, Amazon, and WalMart in place for holiday shopping. Whether they get fully there, I can’t say; but I believe they will be far enough along that Q3 and Q4 will provide impressive numbers, which I think will be good for the stock price in the near term. If it tapers off after that, well, that’s why we have a sell button.

2. Max Levchin. The first time I bought Affirm, way back in January, it was because I read one of the free articles on and thought it sounded interesting. I literally bought just 3 shares to watch it. It did nothing–less than nothing, actually–and I sold in February.

The second time I bought, it was being talked about more on TMF and, given that management is so critical for me, I went hunting for video interviews with Max Levchin. I was blown away. He is everything I hope for in a CEO: brilliant, visionary, humble, and an inspiring leader who wants wins for his customers, end users, employees, and shareholders. I got back in, but the stock struggled. I was shocked that the Shopify news didn’t give it any real bump, especially given what the connection to SHOP did for Global-e. I read the concerns on this board.

When it was still struggling after that and was deep in the red for me, I sadly sold again. When the Amazon deal was announced, I missed the 42% gain from that rally, but inwardly I was cheering for Max. I mean, I want that guy to win. But was BNPL just not a good model for making money? I didn’t know. The Amazon news was just that–news. Not numbers.

3. The rollout of deals and potential. Of course after the Amazon news was the great earnings report and another leap. Okay, so they can make money from this. I hadn’t given them enough time to start the integrations. I got in close to the bottom of that climb and rode it up. Now comes the deal with WalMart and I started to wonder–who’s left? What big retailers remain that don’t already have a BNPL option? What else has Max got up his sleeve?

Because I work in the nonprofit space and have worked in impoverished parts of the country, I also wrestled a bit with the WalMart news. I personally know people who have relied on layaway to provide for their families and to put something under the tree at Christmas. Since you don’t get the items on layaway until they’re paid for, you don’t need a credit check; but you do need to get a credit check to qualify for BNPL with Affirm.

Many people who faithfully pay off their items on layaway will be turned away. I used my google machine, and Affirm is currently just running a soft credit check to decide the risk of someone wanting BNPL. I felt sad, as I knew people, who would otherwise dutifully pay over time, would have harder lives without the layaway option.

And then it hit me. What if the brilliant, visionary, totally good human in charge at Affirm teamed up with the brilliant, visionary, totally good human in charge at Upstart to determine the credit risk of their BNPL users? I felt like bursting into “I Dreamed a Dream” from Les Miserables.

I went to the DMs of both companies on Twitter and shared my dream. Affirm messaged me back this morning to thank me for my kind words about Max Levchin and to say they would pass the message along. Of course that is likely a form of their standard response to suggestions; but it was nice to see them responding so quickly, as it was not an auto reply.

Of course dreaming of a partnership between Affirm and Upstart is just that…MY dream. But it would surely be possible, good for both companies, and good for every piece of the service chain for both of them. And I could retire just by holding two stocks.

For me, the broader lesson of thinking about that potential is that any company with the kind of leadership at the helm of both Affirm and Upstart is constantly thinking about how to solve thorny problems in the world, while making a profit all across their ecosystem of stakeholders. They work hard and play to win, but they play for everyone to win.

Great CEOs do fail, as we all do. Max Levchin has failed with a startup in the past. But
every few months now he’s been rolling out large surprises. And if I can imagine other potential deals in my free time, I’m confident he’s working on way more. He has earned more rope from me.

And I do dream that Affirm and Upstart might one day find each other. They would have to find a way to allow graphics on these boards so we could show fireworks.

Jabbok “I dreamed a dream” River


Jabbok, it seems that Affirm does have something else in common with UPST, ie that Affirm are increasingly re-packaging their loan portfolios for sale. See link below which provides some details on how the loan portfolio is split into PTON debtors and ‘the rest’…

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