FMP
Affirm Holdings Up 46% on Amazon Partnership Announcement
Aug 31, 2021 12:19 AM - Davit Kirakosyan(Last modified: Dec 19, 2023 5:49 PM)
Image credit: FMP
Affirm Holdings, Inc. (NASDAQ:AFRM) shares surged more than 46% today following Friday’s announcement, according to which the company is going to partner with Amazon.com, Inc. (NASDAQ:AMZN), helping Amazon’s customers finance large purchases. Affirm Holdings, which is a leader in the buy now, pay later space, will give Amazon customers an option to split their total cost of $50 or more into monthly payments.
The partnership, which is being tested now, should be rolled out more broadly to Amazon customers in the US in the coming months. It is expected that Affirm could expand its customer base as only 18% of U.S. Amazon users are also customers of Affirm.
The deal, the exact impact of which is difficult to estimate now, may potentially give 20-30% upside to Affirm’s medium-term gross merchandise volume. Analysts at Deutsche Bank estimate the partnership to drive CY22 annual total payment volume (TPV) contribution to ~$7.7bn, with a potential revenue contribution of $385M (potentially ~22% of AFRM).
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