Short-seller Kerrisdale Capital released a scathing report on Affirm Holdings, calling the BNPL leader a subprime lender in disguise. The firm argues Affirm's growth is an "illusion of resilience" built on risky credit to fragile consumers. Its stock dipped initially but recovered slightly after the report.

Kerrisdale contends Affirm's revenue model has shifted, with half its income now from high-APR loans versus merchant fees. The report warns this exposes the company to political risk, especially with President Trump's call for a 10% credit card APR cap. Such a rule would likely crush Affirm's 31% average loan yield.

The short-seller sets a $17 fair value, implying an 80% downside. It warns Affirm's thin credit reserves and reliance on repeat users signal late-cycle subprime patterns. As labor markets soften and delinquencies rise, the firm believes the market will reprice Affirm from a tech growth story to a capital-intensive lender.