Initial public offerings or IPOs are known as a great way for investors to make a big profit in a relatively short time. On average, they can bring investors 40% returns in the first 3 months. Furthermore, if they believe in the company’s long-term success then the sky’s the limit. Successful companies can bring tens of thousands of percent of profit to early investors over time.
Once the initial funding stages are out of the way, IPOs can be a great way for companies to gain exposure to the open market, help the company grow by attracting more capital and improve liquidity. Going public also gives early investors the opportunity to trade shares and easily cash in on their investment.
In this series we’re looking at past and upcoming IPOs, which should give you some ideas for what to invest in. If you’ve heard of Affirm’s fresh approach to online loans, you might be wondering, “is Affirm publicly traded?” or “when is Affirm going public? as you might be interested in investing in the company. Read on to find out about Affirm stock IPO and all the important information about Affirm IPO 2021.
Affirm is a fintech company that provides loans for online purchases in installments. The company was founded in 2012 by PayPal co-founder Max Levchin who remains the CEO.
The company's goal is to make installment purchases more simple and transparent. The company rejects loans with compounding interest and excess fines for overdue payments in favor of simple-interest loans.
It makes money through compensation from merchants when customers use Affirm's payment options, which include "0% APR" (to those who qualify) and simple-interest loans. In case of the interest-free option the fee is fully on the merchant, and in simple-interest loans the end customer also pays.
The company has been riding the wave of the buy-now-pay-later trend, or BNPL, which is very popular around the world and in the US. Many of Affirm's loans are provided by their bank partners.
Affirm's largest customer is Peloton, whose stationary bikes were selling like hot cakes during the 2020 pandemic. Peloton accounted for almost a third of Affirm's revenue in the 2020 fiscal year and a fifth of Affirm's revenue in the 2021 fiscal year.
The company was planning to go public in 2020 but their IPO date was postponed due to good first-day performance from AirBnb and DoorDash that both had IPOs in December. Affirm decided to go for a traditional IPO or direct listing as opposed to a special purpose acquisition company (SPAC), which has been a popular way for companies to go public in recent years.
Affirm IPO price of $49 per share gave the company a $12 billion valuation before the stock grew almost 100% on IPO date. The CEO Max Levchin, who owns 27.5 million shares, has a net worth of $2 billion.
Read on to find out about Affirm IPO date and price and other key info.
Affirm Public Listing Key Data and IPO Date
Affirm IPO Date: 1/13/21
Stock symbol (ticker): AFRM
IPO stock price: $49
Valuation at IPO: $12 billion
Market cap (11/30/21): $35.35 billion
CEO: Max Levchin
Listing method: Direct
Affirm launched its IPO on Nasdaq and went public on January 13, 2021 with the ticker AFRM. The first day of trading on the Affirm IPO release date was nothing short of a success. The stock price was raised several times throughout the IPO process. The company initially priced their shares at $41, then at $44 and raised the price to $49 the day before the IPO. But trading actually opened at $90.90 and closed at $96.36, up almost 100% from the reference price.
A month later the stock price reached a peak of $125 but quickly went down below the IPO level. This is a textbook example of an IPO that would have given early investors a great return on their investment. After the initial trading craze was over, the stock price went down, kept fluctuating between around $50 and $80 for several months and started growing around the end of August 2021, setting a new all-time-high of $168.5 on November 3.
So is it a good idea to invest in Affirm now? Read on to find out...
So What About Investing Now?
The best way to invest in IPOs is to be one of the early investors, because in the case of Affirm IPO trading started at a price that was nearly double of the reference price. But even if we ignore this, AFRM definitely looks like a company to watch, especially for fans of fintech. After the initial peak a month after going public, Affirm IPO stock price went through a dip that lasted most of the year but started going up in late August and reached an all time high of $168.52. It has been falling since then and is now just under $100, still higher than at the Affirm stock IPO date.
The company’s reliance on its favorite partnership with Peloton may be slowly fading away together with Peloton’s sales, but Affirm’s partnerships with Salesforce and Amazon should provide a safety net for their business in years to come.
The company has strong fundamentals for a newly public company. It has a large market cap of $35.35 billion and total revenue of $870 million in the 2021 fiscal year, a 71% increase from last year.
Thanks for reading this overview of Affirm going public. Check out our IPO section to look at other scheduled IPOs. If you want to find companies that match your interests, investment goals and portfolio, try Gainy for some great IPO investment ideas, as well as established blue-chip companies and a variety of other assets.
When is the Affirm IPO date?
The Affirm IPO was launched on June 30, 2021. The company was listed on Nasdaq via a direct listing.
Is Affirm a public company?
Yes, Affirm has been a public company since its IPO date on June 30, 2021. When a company launches an IPO, this means they are becoming public.