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Affirm shares soar 80% as it hits the IPO market

Affirm shares soar 80% as it hits the IPO market

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Affirm (AFRM), the consumer lender led by PayPal (PYPL) co-founder Max Levchin, has nearly doubled in value since its IPO debut, giving the company a market capitalization of USD 23.6b. Shares skyrocketed to USD 97.24 at the market close, resulting in a capitalization of about USD 23.6b for the company. It seems that the buy-now, pay-later solution is a winning game. 

Most of the company's revenues are generated by fees charged to merchants, in addition to offering interest-bearing loans with no late fees to customers.

As a by-product of the pandemic, Affirm gained massive traction in 2020 as consumer lending underwent a tectonic shift from large up-front to small long-term monthly payments. Affirm faces intense competition from other companies like Afterpay (APT), Klarna, as well as PayPal, which recently introduced its own "buy now, pay later" offering.

Why it matters

The enthusiastic reception for Affirm shares could indicate that 2021 will be a profitable year on record for public offerings. With the ongoing romance between U.S. share markets and tech companies, Affirm's FinTech rivals are expected to follow its public listing path.
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