![]() Undoubtedly, CEO Jack Dorsey is one of the most exciting men to bet on. ![]() Today, expectations may be unrealistically low.īlock, formerly Square, underwent a name change as the firm looked to move above and beyond payments. Each firm had unrealistically high expectations just over a year ago. Block and PayPal stock collapsed 78% and 76%, respectively, from peak to trough. Now that expectations have been reset, it may be wise to give the beaten-down fintechs a second look. If anything, today's hot fintechs may evolve to become just another bank as they look to expand their financial service offerings. However, don't expect the big banks to go down without a fight. Over the long run, the fintechs will likely be able to cut further into the turf of the big banks. With deep pockets and innovative capabilities of their own, the banks now have the edge over the fallen fintech companies. Strong balance sheets matter more than ever now that credit is harder to come by. Fast-forward to today, and it's now apparent that fintech investor ambitions were slightly exaggerated. The old banks have been wildly profitable for hundreds of years, and fintech was seen as the disruptive force to put them on their knees. Just over a year ago, it seemed like the fintech leaders would put the traditional banks on notice. While the pandemic may have accelerated various technological trends, including fintech, it soon became clear that the post-2020 tech boom overextended to the upside, setting the stage for a harrowing crash in many of the "story-driven" stocks.Īs the Federal Reserve continues to raise interest rates, it's become harder to value fintech based on its hazy growth stories. Such a premium quickly swelled as investors looked to the tech sector as a critical industry to navigating out of pandemic-era lockdowns. ![]() By focusing on huge total addressable markets and forward-thinking technologies, one can justify paying a bit of a premium. ![]()
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