CE100 Index Surges 5% as BNPL Stocks Deliver Strong Gains

Up, up and ….

Well, not quite away. But up. And so, even with a 5% gain in the past week, the PYMNTS ConnectedEconomy 100 Index (CE100™) is still down more than 31% for the year.

CE100 Relative Performance

Source: PYMNTS

The rebound was led by the Pay and Be Paid pillar, which soared 8.4% on the week, followed closely by the Communications pillar, up 8.1%. All pillars managed to post gains as the third quarter of 2022 dawned.

And in gaining a sense of the prime movers: Buy now, pay later (BNPL) names were among the most significant gainers throughout the week.

BNPL Names Gain Ground

Sezzle was the star performer here, rallying more than 52% through the past four sessions in a holiday-shortened trading week. That surge came, admittedly, off a low base, and not all that long ago the shares were fetching 25 cents. But, it should be noted that the CE100 Index is equal weighted, so the impact is the same no matter the market cap (whether micro or mega).

Affirm followed on the heels of Sezzle’s ascent, up more than 35%. The company may, as noted by at least some Wall Street firms, gain from its pact with Amazon — as this is the first year where the BNPL option will be available during Prime Day. Assuming Affirm finances 50% of Prime Day sales, as sell-side firm Stephens predicted, according to Yahoo Finance, this would double Stephens’ $5 billion Q1 gross market value (GMV) estimate and boost the annual GMV tally by 20%.

Recent research from PYMNTS stated that older and higher-income demographics are some of the fastest-growing groups of BNPL users. As many as 71% of BNPL users with annual incomes greater than $100,000 increased their usage of the service over the past year.

See also: How Older, Prime Borrowers Can Help BNPL Firms Ride Out Storm

Vroom gained 25.4% in the wake of news that convenience stories like FavTrip are partnering with Vroom Delivery. Under the terms of that pact, the companies will launch proprietary online subscription services offering discounts on food.

The Decliners

As might be expected, not every name went up this past week. And if there’s a theme traceable to the decliners that marked the first week of the new quarter, it might be that investors looked upon some of the Asian platforms with a bit of disfavor.

Tencent was down 8.4%. As CNN reported into the end of the month, Tencent’s biggest shareholder, Prosus, will reduce its stake — though a year ago, Prosus said that it would hang onto its shares for at least three years. The funds gleaned from the sale will be used by Prosus to enable a share repurchase initiative. Prosus owns about 28% of Tencent, according to reports. Elsewhere, Pinduoduo was down 6.2%.

Meanwhile, Irish online bookmaking, gaming and gambling firm Flutter Entertainment confirmed that Paddy Power’s CEO is departing, as reported by Gambling News. The shares slipped by 3.9%.

A short week, a new quarter and a long road ahead to finish what charitably might be called a challenging year. The CE100 has posted some gains — now let’s see if they stick.