Affirm stock rockets 90% after IPO

Affirm stock rockets 90% after IPO

Affirm Holdings Inc. shares are surging about 90% in midday trading Wednesday after the financial-technology company made its public debut.

Shares of Affirm

opened at $90.90 Wednesday after listing on the Nasdaq, with the first trade coming at 12:20 p.m. ET. The company priced its initial public offering at $49 a share late Tuesday, above an already raised range of $41 to $44 a share.

The company raised at least $1.2 billion through the offering. Underwriters have access to an overallotment of 3.7 million shares beyond the original 24.6 million shares that Affirm sold through its IPO.  Affirm reportedly delayed its IPO from late last year given the big first-day stock moves for Airbnb Inc.

and DoorDash Inc.

Affirm, led by PayPal Holdings Inc.

cofounder Max Levchin, offers payment options that let people make online purchases in installments. The company receives compensation from merchants when customers opt for one of Affirm’s lending options. Affirm has an interest-free “0% APR” offering as well as a “simple-interest” loan product through which it also gets paid on the consumer end of a transaction.

Affirm IPO: 5 things to know about the fintech company shaking up online credit

The company’s biggest customer is Peloton Interactive Inc.
which accounted for about 28% of Affirm’s revenue in its latest fiscal year that ended in June. Affirm saw revenue of $509.5 million during its last fiscal year, up from $264.4 million a year earlier. The company posted a net loss of $112.6 million, compared with a loss of $120.5 million in the year-prior period. 

“The pandemic has created a favorable environment as more value-conscious shoppers are seeking ways to finance online purchases in a seamless manner,” MKM Partners analyst Rohit Kulkarni wrote in a pre-IPO note to clients.

Affirm works with bank partners who originate many of the company’s loans.

The offering comes as the Renaissance IPO ETF

has gained 22% over the past three months and as the S&P 500

has risen 8.5% over the same span.

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