There’s more pain coming for investors who own buy now, pay later plays, Jim Cramer says

0

CNBC’s Jim Cramer on Wednesday warned investors that if they own any buy now, pay later stocks, they should brace themselves for more damage to their portfolios.

“These stocks never should’ve been worth so much in the first place. Their business models were much more attractive when interest rates were incredibly low, but it remains to be seen if they work in a more normal environment,” the “Mad Money” host said.

“Even if it doesn’t seem like it at the time, earnings matter. Valuations matter. The economic landscape, it matters. … That’s what we’ve learned this year, and it’s been agonizing if you had fintech exposure. I don’t think the pain is necessarily over,” he added.

Buy now, pay later services, or BNPL, rocketed in popularity during the pandemic as consumers shifted to online shopping. The space for BNPL companies has since grown, with companies such as Affirm, Block, Upstart, PayPal and Apple in tight competition.

Cramer said that BNPL’s boost from the pandemic is long gone, especially as Wall Street worries about a looming recession and the Federal Reserve fights to beat down inflation.

“The moment the Federal Reserve declared war on inflation in November, Wall Street turned against growth, including the whole financial technology edifice. … The buy-now pay-later plays, like Affirm, are everything this new market hates: unprofitable, expensive,” he said.

“For more diversified payment plays like Block and PayPal, they also had cryptocurrency trading exposure, which has turned into” a hindrance for them, he added.

Cramer also pointed out that BNPL stocks are well below where they once were, and it’s unclear whether they’ll make a recovery.

“It’s been an abominable decline,” he said.

Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.

Disclaimer

Questions for Cramer?
Call Cramer: 1-800-743-CNBC

Want to take a deep dive into Cramer’s world? Hit him up!
Mad Money TwitterJim Cramer TwitterFacebookInstagram

Questions, comments, suggestions for the “Mad Money” website? [email protected]

FOLLOW US ON GOOGLE NEWS

 

Read original article here

Denial of responsibility! Vigour Times is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a comment
Enable Notifications    OK No thanks