Affirm shares up nearly 100% in debut

Shares of Affirm Holdings, founded by PayPal’s cofounder Max Levchin, nearly doubled in their Nasdaq debut Wednesday, valuing the provider of installment loans to online shoppers at more than $22 billion.

Affirm’s shares jumped as high as $103 shortly after they began trading around midday, far above its initial offering price of $49. The shares closed at $97.24. Affirm had priced its shares at $49 apiece, above its target range of $41 to $44 each.

“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,” Levchin said in a telephone interview.

At least eight US companies were slated to price IPOs this week, looking to raise a total of more than $5 billion in what’s expected to be the biggest week for listings in more than five years.

Affirm is another example of a company whose stock price doubled on its first trading day, a trend prompting criticism about how investment banks price shares in an IPO.

Venture capital-backed Affirm was founded in 2012 to offer small loans to people without credit histories or savings accounts. More than 6.2 million consumers have used the platform as of Sept. 30, 2020, according to a regulatory filing by the company. For the fiscal year ended June 2020, it raked in $509.5 million in net revenue, with a net loss of $112.6 million.

Major investors include Peter Thiel’s Founders Fund, Singaporean sovereign wealth fund GIC, Spark Capital, Fidelity Management and Research Co. LLC.