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After a delay, payment technology company Affirm Holdings Inc. is about to be paid.
The company, which allows people to buy goods and pay over time, valued its initial public offering at $ 49 a share on Tuesday evening, according to reports from Bloomberg News and Reuters. That price is $ 5 per share higher than the high end of its proposed range, and would raise at least $ 1.2 billion and give the company an initial market cap of $ 11.9 billion, on the basis of Affirm’s Securities and Exchange Commission filings.
Affirm AFRM,
which was co-founded and is led by PayPal Holdings Inc. Co-founder of PYPL Max Levchin, allows customers to pay for their purchases online over time. The company makes money on the merchant side of a transaction when consumers use one of Affirm’s installment products, the most lucrative of which offers a “0% APR” option that allows consumers to make purchases. over time without incurring interest. The company also offers a “simple interest” loan option whereby it charges consumers the upfront payment.
Executives expected Affirm to go public in late 2020, but ended up delaying the IPO after huge day one pops among other so-called unicorns went public, such as Airbnb Inc.
and DoorDash Inc. DASH,
Read more: After a year of impressive pandemic offerings, these tech companies expect to keep operating
Affirm generated revenue of $ 509.5 million in its most recent fiscal year, which ended in June, up from $ 264.4 million a year earlier. The company recorded a net loss of $ 112.6 million, compared to a loss of $ 120.5 million in the same period a year earlier.
Among the brands that use Affirm for installment payment options is Peloton Interactive Inc. PTON. The connected exercise equipment maker accounted for around 28% of Affirm’s revenue in its most recent fiscal year.
See also: Five things to know about Affirm when posting
Affirm is one of the many players in the Buy It Now, Pay Later business. Competitors include Afterpay Ltd. APT,
who trades in Australia; Klarna, who received support from Visa Inc. V,
; and Uplift, which focused on the online travel market.
Affirm is now expected to start trading on Wednesday on the Nasdaq Stock Exchange with the ticker symbol “AFRM.” “In SEC filings, the company said it would seek to sell 24.6 million shares, and underwriters – led by Morgan Stanley, Goldman Sachs and Allen & Co. – have access to an over-allotment. comprising 3.7 million additional shares.
The IPO of Affirm comes as the IPO of Renaissance IPO ETF,
has gained 22% in the last three months and as an S&P 500 SPX,
increased 7.6% during this period.
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