The writing was on the wall Confirm (NASDAQ: AFRM) announced the terms of its public debut. While the company may not be a household name, it is the brainchild of Max Levchin, one of the co-founders of payment ping processing. PayPal (NASDAQ: PYPL). The online lender offers financing and installment loans to customers on e-commerce sites.
After initially planning to price its shares between $ 33 and $ 38, investors’ interest dropped to $ 41 to $ 44 per share. On the eve of its debut, Affirm priced its shares above $ 49. Even that was not enough to dampen investors’ enthusiasm.
Image Source: Confirm.
The company’s initial public offering (IPO) followed a pattern that played out repeatedly at the end of 2020 as investors accumulated shares at a dizzying rate. The stock started trading at about 20:20 EST at $ 90.90, almost 86% above the offer price, and never looked back. The stock ended the day at $ 97.24, more than 98% above the offer price.
Affirm offered 24.6 million shares to investors. If the underwriters exercised their right to sell an additional 3.69 million shares, the offer would have cost as much as $ 1.38 billion, which the company valued at about $ 23 billion.
For the fiscal year ended June 30, 2020, Affirm reported revenue of approximately $ 509 million, which is 92% higher than on an annualized basis. At the same time, the company was able to reduce its net loss to $ 113 million, a slight improvement from a loss of $ 120 million in the previous year. Affirm’s growth accelerated in the first three months of fiscal 2020, with revenue growing 98% year-over-year to $ 174 million. The company halved its red ink, with a net loss of $ 15 million, compared to $ 31 million in the previous quarter.
It is important to note that this Peloton Interactive (NASDAQ: PTON) is Affirm’s largest customer and represents 30% of its revenue in the last quarter.