Claim he nearly doubled his debut after $ 1.2 billion IPO
Affirm Holdings Inc. nearly doubled in its public market debut as the last multi-billion dollar tech company to start trading significantly higher than its initial public offering price.
Shares of the San Francisco-based company, which offers installment loans to online shoppers, closed 98% higher at $ 97.24 in New York exchanges after rising to 110% earlier on Wednesday. . The company sold 24.6 million shares at $ 49 each during Tuesday’s IPO to raise $ 1.2 billion, valuing the share above a range that had already been raised.
Affirm closed on Wednesday with a market value of more than $ 23 billion. The company has a fully diluted valuation of nearly $ 30 billion, including options and restricted stock units, according to Bloomberg calculations.
Airbnb Inc. and DoorDash Inc. each soared above their IPO prices when they went public in December, showing appetite for tech listings – especially among retail investors – and raising questions about the price. transactions. Airbnb is currently trading around 150% more than its quotation at a market value of over $ 100 billion, while DoorDash is up around 94%.
Affirm’s IPO is expected to be followed by several other high profile listings. Online marketplace for used luxury goods Poshmark Inc. and pet supplies retailer Petco Animal Supplies Inc. has stock sales on Wednesday. Mobile game developer Playtika Holdings Inc. and automotive supply and maintenance company Driven Brands Holdings Inc. is on deck for Thursday.
Founded in 2017 by PayPal Holdings Inc. co-founder Max Levchin, Affirm Account Singapore GIC Pte, Khosla Ventures, Founders Fund, Lightspeed Venture Partners and Shopify Inc. among its investors. Levchin remains the largest shareholder after listing.
Levchin, Chairman and CEO of Affirm, said the company had just renewed its alliance with its largest business partner, the home exercise company. Peloton Interactif Inc.
“Peloton has been a great partner for us,” said Levchin. “We’re both good to each other, that’s one way of putting it.”
Affirm is considering possible expansion through acquisitions, Levchin added.
For the third quarter, Affirm recorded a net loss of $ 15 million on revenue of $ 174 million, compared to a loss of $ 31 million on revenue of $ 88 million in the same period in 2019, according to his record.
Dependent on the peloton
Peloton was by far Affirm’s largest business partner, accounting for 30% of its total third quarter revenue. Its top 10 traders, including Peloton, produced around 37% of Affirm’s revenue during the period, creating the risk that its business would be affected by the loss of one of those partners, according to the filing.
More than 6,500 traders use the Affirm platform, according to its prospectus.
Lightspeed partner Jeremy Liew, Affirm board member, said that while the company’s success is currently bolstered by Peloton’s, the company reflects its large merchant base.
“It’s almost like an index of the health of e-commerce,” Liew said. “Over time we will see other businesses do well and they will become more and more important to Affirm as they are more and more important to e-commerce.”
Liew added that the IPO’s price was set to make it attractive to groups that were going to be long-term investors.
Affirm’s offer was led by Morgan Stanley, Goldman Sachs Group Inc. and Allen & Co. Its shares are traded on the Nasdaq Global Select Market under the symbol AFRM.
(Updates with the closing share price in the second paragraph)