Chime stock surged post-IPO, corrected due to stablecoin bill, potential impact on business model.

Fintech company Chime Financial (NASDAQ: CHYM) saw its stock surge nearly 40% above its IPO price of $27 to open at $43, but has since corrected to around $32. The sell-off may be driven by the Senate passing a stablecoin bill, threatening Chime’s business model. Chime relies on interchange fees, which could be impacted by stablecoin adoption.

Chime, known for its low-cost financial services and mobile-first approach, could be vulnerable to stablecoin competition. However, the threat may not be existential, as past attempts to shift away from credit cards have had limited success. Chime’s reliance on partner banks for backend operations gives it flexibility to adapt to changing payment trends.

Despite potential challenges, Chime’s core business is showing growth and improved profitability. With revenue up over 30% in 2024 and net losses narrowing, Chime’s investments in marketing and brand building are paying off. The company’s current valuation at $32 implies a market cap of about $11 billion, trading at around 6x trailing revenues.

While investing in a single stock like CHYM can be risky, diversified portfolios like the Trefis High Quality (HQ) Portfolio, consisting of 30 stocks, have consistently outperformed the S&P 500. This portfolio offers higher returns with lower risk compared to the benchmark index, providing a more stable investment experience.

Read more at Nasdaq: What’s Happening With Chime Stock?