The shares of Affirm Holdings Inc. rise about 90% in afternoon trading Wednesday after the financial technology company made its public debut.
Shares of Affirm AFRM,
opened Wednesday at $ 90.90 after listing on the Nasdaq, with the first trade at 12:20 p.m. ET. The company priced its first public offering late Tuesday at $ 49 per share, above an already increased range of $ 41 to $ 44 per share.
The company raised at least $ 1.2 billion through the offering. Underwriters have access to an over-allotment of 3.7 million shares in addition to the original 24.6 million shares that Affirm sold during its IPO. Affirm reportedly postponed its IPO late last year given the large first-day stock movements for Airbnb Inc. ABNB,
and DoorDash Inc. DASH,
Confirm, led by PayPal Holdings Inc. PYPL,
co-founder Max Levchin, offers payment options that allow people to make online purchases in installments. The company receives compensation from merchants when customers choose one of Affirm’s lending options. Affirm has an interest-free “0% APR” offering and a “simple interest” loan product that also makes it paid at the end of a transaction as a consumer.
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The company’s largest client is Peloton Interactive Inc. PTON,
which accounted for approximately 28% of Affirm’s sales in the last fiscal year ended June. Affirm posted revenue of $ 509.5 million for the past fiscal year, up from $ 264.4 million a year earlier. The company posted a net loss of $ 112.6 million, compared to a loss of $ 120.5 million in the same period last year.
“The pandemic has created a favorable environment as more value-conscious shoppers are seeking ways to seamlessly finance online purchases,” MKM Partners analyst Rohit Kulkarni wrote in a pre-IPO note to customers.
Affirm works with banking partners who have provided many of the company’s loans.
The offering comes as the Renaissance IPO ETF IPO,
has risen 22% in the past three months and as the S&P 500 SPX,
has increased by 8.5% over the same period.