Why Chime Stock Dropped 24% in September

Core Insights - Chime Financial's stock experienced a 24% decline in September following its initial public offering (IPO), which initially inflated its valuation [1] - The company operates as an online bank targeting lower-income customers, partnering with other banks for services and generating revenue through swipe fees [3] - In Q2 2025, Chime reported a 37% year-over-year revenue increase, with platform revenue growing by 113%, and a 23% increase in customer base [4] - Despite a gross margin of 87%, Chime's net loss widened to $923 million, primarily due to IPO-related stock-based compensation [5] - The company is launching new products, including a membership program, and expects revenue growth of 28% to 29% for the full year [6] - Chime's stock price has decreased from an IPO price of $27 to $21, reflecting a more reasonable valuation of 4 times trailing 12-month sales [7][9] Company Overview - Chime is characterized as a differentiated digital banking platform with significant growth potential, particularly in attracting new members and expanding its service offerings [8][9] - The company has a current membership of 8.7 million, indicating a long growth runway as it continues to enhance user engagement [4]