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Us fintech stocks suffered a heavy blow in the first half of 2022: the sharp decline in valuation affected the venture capital industry

Time : 15/06/2021 Author : 1l24ym Click : + -
        There are many fintech or fintech companies available for observation and purchase. The problem is that with the slowdown in growth driven by the COVID-19, many U.S. fintech stocks suffered a heavy blow in the first half of 2022. In addition, market dynamics such as industry rotation and rising interest rates also put pressure on payment stocks. Rising concerns about the US economic recession have raised questions about which payment stocks can best withstand the business downturn. More importantly, as well funded start-ups such as stripe challenge industry giants, competition is also intensifying. Technology giants such as apple and Amazon are also cannibalizing fintech companies. Digital technology, cryptocurrency and financial software are reshaping e-commerce, payment networks, online lending, personal finance, banking and other industries.
        The innovation of fintech companies is also reflected in other aspects, such as "buy first, pay later" consumer loans. Fintech companies belong to several groups of IBD, including financial software and financial investment management. Among the 197 industries tracked, IBD's largest financial technology stocks ranked 114th. The third quarter earnings of visa shares will be announced on July 26. MasterCard will announce its financial results on July 28. Their performance guidance may affect other payment stocks. Bank of America analyst jasonkupferberg said in a report that according to the quarterly interim data released by visa on June 1, we believe that the basic business performance of v/ma is slightly higher than expected on the whole, but it may face exchange rate resistance due to the strength of the US dollar.
        "Although we expect V shares and Ma to reaffirm their confidence in the stable growth of their currencies in 2022, we expect both to cause additional foreign exchange resistance to the outlook.". IBD comprehensive rating is composed of five other IBD stock ratings: EPS rating, relative strength rating, cumulative / distributive rating, SMR rating of sales, profit margin and return on equity, and industry group rating. The sharp decline in the valuation of listed fintech companies has affected the venture capital community. In the latest round of financing of consumer finance company klarna, the company's valuation reached US $6.5 billion, down about 85% from the previous valuation of US $45.6 billion.
        On May 18, square parentblock (SQ) held a highly anticipated investor day. Management advocates ecosystem strategies in ecosystems. AFRM shares, one of the worst performing technology stocks in 2022, rose sharply in the third quarter earnings report of confirmholdings (AFRM). The share price of marqueta soared after it released its first quarter earnings report. In addition, sofitechnologies' share price rose after announcing its earnings in advance. The share price of nuholdings, a Brazilian based digital bank, rose after its first quarter revenue exceeded expectations.
        Due to the slowdown in e-commerce growth, paypalholdings lowered its forecast for 2022, which some analysts regarded as a "liquidation event". At the same time, competition in more fields is also intensifying. According to a pitchbook report, the fintech industry raised $121.6 billion from venture investors in 2021, an increase of 153% year-on-year. Strip, which is well funded, is a competitor of many industry giants. At the 2022 global developer conference held in June this year, apple officially announced the "buy now, pay later" service, which allows consumers to divide the cost of buying applepay into four equal periods without interest or late fees.
        This service will be supported by the MasterCard network and can be used in all places in the United States that accept applepay, whether online payment or in app payment. Apple is developing its own payment processing technology and infrastructure for future financial products. According to the multi-year plan, the iPhone manufacturer may conduct internal risk assessment on customer service businesses such as loans, fraud analysis, credit inspection and dispute resolution. Apple stock said on April 7 that it would cooperate with stripe and adyen to provide in store payment services for iPhone for American consumers.
        In February this year, apple unveiled plans for a new iPhone app. This new app turns iPhone into a sales terminal. This service allows merchants to accept contactless credit or debit cards. Stripe will provide its corporate customers with click to pay services on iPhone, including Shopify's point of sale app. Then there is Amazon. The e-commerce giant is launching a "prime buy" button on a third-party website. Oppenheimer said in a report that the service may compete directly with PayPal in small businesses.
        Oppenheimer's report said: "it may take several years to adopt Amazon's payment mechanism, and many retailers who do not currently use Amazon's platform may not want to give competitors the opportunity to process the payment mechanism." "However, Prime's delivery speed, customer satisfaction and potential improvements in logistics are all unique payment services for this small retailer.". Pypl management revealed at the quarterly earnings conference call in December last year that the change of the company's stock strategy surprised Wall Street analysts. PayPal's stock fell on the IBD rankings. The ranking list is a list of leading stocks with outstanding performance in technical and fundamental indicators carefully planned by IBD.
        They act as intermediaries between banks and retailers. They signed contracts with retailers to handle credit cards and other transactions. Businesses face increasingly fierce competition from stripe, adyen and other companies in terms of acquisition. At the same time, in 2021, several fintech stocks were listed through traditional initial public offerings (IPOs) or mergers with special purpose acquisition companies (spacs). In addition, venture capital received by start-ups in the fields of payment, e-commerce, online lending and cloud software has been strong. In addition, the IPOs of some fintech companies have also been disappointing. On September 20, toast (tost), a catering technology company, made an initial public offering.
        Sofi focuses on student loans and car loans. Analysts say it is evolving into a new bank. Federal regulators approved Sofi's application for a bank license. In February this year, Sofi agreed to acquire technisys, a multi product core banking platform, with an all stock transaction of $1.1 billion. At the same time, marqeta (MQ) has created branded debit cards and prepaid cards for corporate customers. A recent optimistic report from UBS said: "in the long-term transformation from cash payment to credit card payment, marqeta will still gain share, win new high growth customers, and benefit from the expansion of its largest customer, block.
        ”。 Some well-known fintech companies have not yet been listed. Chime, an online bank, is an example. In the latest round of financing, chime was valued at $25billion. It provides banking services through mobile phones. This is one of several new banks. In March 2021, stripe raised $600million in a new round of financing, with a valuation of $95billion. This figure is higher than the $36billion in April 2020. "Stripe is best known for its relationship with Shopify, the darling of e-commerce, and Amazon, as well as its developer centric model, which makes it the favorite payment platform for Silicon Valley start-ups.
        ”。 Stripe has not made any public disclosure on revenue, payment amount or EBITDA. Its investors include Shopify. Timothychiodo, an analyst at Credit Suisse, said in a report: stripe was initially a payment partner for start-ups and technology-based small and medium-sized enterprises, but now its enterprise business is the largest and growing fastest. "Our recent industry discussions have shown that stripe is increasingly required to participate in the RFP of large enterprises and businesses.". A wave of fintech start-ups are also trying to squeeze traditional banks and credit card companies out of the market.
        As consumer spending shifts to online and mobile platforms, cash and checks play a smaller role. Financial technology companies such as PayPal and square are waging a fierce battle to attract merchants to join the payment ecosystem and bring billions of dollars in transaction costs. For some fintech companies, they are under pressure to establish bilateral platforms that serve both businesses and consumers. Look for fintech companies that have intellectual property rights and create obstacles for competitors. In addition, we should target fintech stocks that expand their overall target market by expanding products and services. PayPal acquired the shares of Argentina's "free market" (Meli) in 2019.
        Analysts expect more cooperation between fintech companies and e-commerce companies such as Shopify. In July 2019, Fiserv completed the acquisition of firstdata (FDC) with $22billion of shares. Fiserv sells information and business-related services to banks, credit unions and investment managers. In addition, global payment and general system services agreed to merge in May 2019, with an all stock transaction of $21.5 billion. This merger created a stronger competitor in the merchant acquisition market. In the banking industry, artificial intelligence plays an important role in detecting fraud.
        Cloud computing software is replacing paper-based systems in business to business payments. The most optimistic observers said that this technology could play a role in securities clearing and settlement, digital identity and payment as early as 2025. Blockchain is the software technology behind bitcoin and other cryptocurrencies. It is a shared public account book, which can track transactions and ensure that the records of these transactions remain transparent and tamper proof. In addition, smart contracts are programmed into blockchains to automate tasks. Handling insurance claims is an example. GoldmanSachs, JPMorganChase and bankofamerica have been investing in blockchain technology.
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