Affirm doubles after starting to trade despite strong IPO pricing

Today shares of Affirm, a buy-now-pay-later unicorn, started trading above $90 per share, far above its $49 per-share IPO price, a figure that was already miles above the company’s early expectations.

The pop comes after Affirm raised its pricing range earlier this week, to $41 to $44 per share, up from an initial range of $33 to $38 per share. To see the company double from its raised price implies strong demand for its shares, a thin float, or both.

Affirm’s explosive debut comes on the heels of similarly-strong results from DoorDash, C3.ai, and Airbnb. Those companies’ debuts were so strong that Roblox delayed its IPO, later swapping a traditional IPO for a direct listing to get around the pricing issue.

Today’s IPO shows that the same dynamics that were at play in those IPOs have persisted into 2021. More public debuts are expected in Q1, including Coinbase, another well-known unicorn. Other names like Robinhood, Bumble, and others are in the wings.

Affirm’s first-day performance will certainly raise eyebrows from regular critics of the traditional IPO process. But the company did raise more money than it perhaps anticipated, and is having a raucous first-day’s trading, so it’s hard to fret too much for the company. If its share price is still as high in a month as it is today, perhaps it was as underpriced as some will claim.

Fintech

Affirm’s pricing brings a green splash to a busy week for fintech giants. Yesterday, Visa’s $5.3 billion acquisition of Plaid failed to go through due to regulatory concerns. While the fallen deal could have a chilling effect on fintech startups, Plaid told TechCrunch that it saw 60% customer growth in 2020, bringing it to more than 4,000 clients. Plaid’s next step, per many in the VC and tech community, will be even bigger than its once-planned $5.3 billion dollar exit.

Some tweets here to give you a sense of the momentum around fintech right now:

Affirm’s pop and Plaid’s forward-looking attitude show that the exit market for fintech feels both optimistic and energetic.