Shares in Affirm Holding (AFRM) soared in early trading on Monday amid the consumer financing firm’s new partnership with Amazon.com (AMZN). The boost for Affirm stock follows a recent similar deal in which Square (SQ) purchased Afterpay.
Affirm said after the market close on Friday that Amazon is testing Affirm’s system of buy now, pay later, also known as BNPL installment payment plans, with some customers. The e-commerce giant plans to make Affirm’s BNPL services more broadly available in the coming months.
Affirm stock soared nearly 40% to near 95 in early trading on the stock market today. AFRM stock launched an initial public offering in January. Amazon stock edged up 0.4% to 3,362.44.
Affirm stock reports fiscal fourth-quarter earnings on Sept. 9.
Affirm also provides BNPL services to Amazon rival Walmart (WMT). BNPL services generally split payments into three or four equal installments over two months or less. Walmart and Affirm, though, stretch out some BNPL plans to 18 and 24 months. Most BNPL services are interest-free if you pay the installments on time.
Affirm Stock: Biggest Customer Peloton
Affirm’s biggest customer has been home fitness giant Peloton Interactive (PTON), which makes pricey treadmills and stationary bikes. Other Affirm customers include Nordstrom (JWN), Nieman Marcus, Dick’s Sporting Goods (DKS), and Williams-Sonoma.
Square on Aug. 1 acquired Afterpay in a $29 billion all-stock deal. AFRM stock rose on the Square purchase of Afterpay on speculation it could also be a takeover target.
IBD offers a broad range of growth stock lists, such as Leaderboard. Investors also can create watch lists for companies like Affirm stock, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.
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