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Within the IPO, Affirm has offered 24,600,000 shares of its Class A common stock. The offering will close on January 15.
Affirm, Inc (NASDAQ: AFRM), Max Levchin’s lending company that provides financing for one-time online purchases, has debuted on the Nasdaq trading exchange. Affirm stock has soared 98% in the IPO, jumping from the starting price of $49 to over $90 per share. Notably, the initial target price was $41 to $44. On the first day of public trading, it more than doubled, as AFRM stock closed at $97.24. The company raised $1.2 billion in the offering, with its valuation reaching more than $23 billion.
Affirm founder Max Levchin said:
“We have gotten to the point of the journey where we’re on the precipice of becoming a known brand among both the investor community, and consumers and merchants. Being publicly traded is helpful in that regard.”
Affirm confidentially filed for an IPO in October 2020. In November, the company made another move to accelerate the process, reporting strong growth in the revenues as well as an increase in the number of active users. This January, Affirm set a target price for its shares and decided on how much it is planning to raise in the offering.
Affirm has offered 24,600,000 shares of its Class A common stock. The IPO underwriters have a 30-day option to purchase up to an additional 3,690,000 shares of Class A common stock at the initial public offering price, less underwriting discounts and commissions. The offering will close on January 15.
Morgan Stanley (NYSE: MS), Goldman Sachs & Co. LLC (NYSE: GS), and Allen & Company LLC are acting as lead book-running managers for the offering. RBC Capital Markets, Credit Suisse (NASDAQ: CS), Barclays (LSE: BARC), Trust Securities, Siebert Williams Shank, and Deutsche Bank Securities are acting as book-running managers for the offering.
Shopify Takes Advantage of Affirm IPO
Last year, Affirm partnered with Shopify Inc (NYSE: SHOP), the Canadian multinational e-commerce company. The latter owns an 8% stake in Affirm, it was granted warrants to buy up to 20.3 million shares in Affirm. In addition, Shopify is Affirm’s third-biggest shareholder. Within the partnership deal, Shopify named Affirm as its exclusive partner to power split payments across Shopify’s U.S. storefronts.
At the beginning of 2020, both companies saw their businesses exploding as a result of online shopping growth. Now, when Affirm IPO has seen such a success, Shopify has benefited as well. With Affirm’s debut on Wednesday, Shopify’s stake is worth about $2 billion.
On Wednesday, Shopify stock rose as well. It closed 0.9% up, at $1,199.82. After hours, it added a further 0.02% to $1,200.00. Shopify’s market cap is $144.86 billion. Year-to-date, its stock is 6% up.