Affirm Holdings Inc. shares nearly doubled on Wednesday afternoon after the financial technology company made its debut.
Shares of Confirmed AFRM,
opened at $ 90.90 Wednesday after being listed on the Nasdaq, with the first trade at 12:20 ET. The initial public offering priced $ 49 per share late Tuesday, above an already increased range of $ 41 to $ 44 per share. Shares recently changed from $ 98.
The company raised at least $ 1.2 billion through the offer. Underwriters have access to a total of 3.7 million shares beyond the original 24.6 million shares sold by Affirm through its IPO. Affirm reportedly delayed its IPO from late last year, given the major first-day stock shifts for Airbnb Inc. ABNB,
and DoorDash Inc. DASH,
Confirmed, led by PayPal Holdings Inc. PYPL,
co-founder Max Levchin, offers payment options that allow people to make payments in installments online. The company receives compensation from merchants when customers opt for one of Affirm’s loan options. Affirm has an interest-free “0% APR” offer as well as a “simple interest” loan product whereby it is also paid at the end of a transaction by the consumer.
Levchin told MarketWatch that transparency in terms of how much consumers will eventually pay for a given purchase “becomes a required feature and not a nice thing to have” among the generations who are currently “financially active” and the following.
“Turning credit is a tool that is not as useful as it is dangerous,” he said in an interview after the deal began. Levchin predicted that the majority of established players would switch to simple-interest products as compound.
Confirm IPO: 5 things to know about the fintech company shaking up online credit
The company’s largest customer is Peloton Interactive Inc. PTON,
which accounts for approximately 28% of Affirm’s revenue in its most recent financial year, which ended in June. Affirm had a turnover of $ 509.5 million in the last financial year, compared to $ 264.4 million a year earlier. The company showed a net loss of $ 112.6 million, compared to a loss of $ 120.5 million in the previous year.
“The pandemic has created a favorable environment as more value-conscious buyers seek ways to finance online purchases seamlessly,” MKM Partners analyst Rohit Kulkarni wrote in a comment to customers.
Affirm works with banking partners which is a lot of the loans of the company.
Levchin foresees great opportunities, arguing that we are ‘still relatively early in terms of what payments and money look like’, calling the financial services sector perhaps the largest in the world after energy. Affirm has expanded its trading base, which now stands at more than 650,000 brands, and the company has arrangements with companies such as Walmart Inc. WMT,
and David Yurman, which includes in-store financing elements along with online elements.
Another potential that has potential is customer loyalty. “I learned not to advertise products the hard way,” Levchin said, although he noted that “there are a huge amount of opportunities to reward customers for bringing their money to the retailers for which they are.” love. ‘
The offer comes as the Renaissance IPO ETF IPO,
has increased by 22% over the past three months and as the S&P 500 SPX,
increased by 8.5% in the same team.