- Affirm is postponing its scheduled IPO until next year, making it the second company in days to suspend its public debut, according to the Wall Street Journal.
- The move comes shortly after Roblox decided to postpone its planned 2020 IPO until next year in order to seek a higher price, given strong investor demand for high-growth technology IPOs. .
- The recent IPO frenzy was accelerated by the strong commercial debuts of Airbnb and DoorDash earlier this week.
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Affirm’s 2020 IPO has been on hold until next year, the Wall Street Journal reported on Saturday, citing people familiar with the matter.
The point-of-sale lender’s decision to postpone its IPO comes shortly after Roblox decided to postpone its scheduled 2020 IPO until next year in order to seek a higher price, given the strong investor demand for high-growth technology IPOs.
Affirm planned to start pitching its shares to potential investors next week and was on track to receive a market valuation of up to $ 10 billion, according to The Journal.
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Part of the reasons Affirm delayed its bid was due to high price spikes in recent offers from Airbnb and DoorDash, as well as delays by the Securities Exchange Commission due to a surge in requests for quotes from companies. private companies, the Journal reported.
Airbnb jumped 143% on its first day of trading Thursday, while DoorDash closed 86% higher on its first day of trading Wednesday.
Now, Affirm’s public debut will not take place until January at the earliest, according to the report.
Affirm and Roblox try to strike a delicate balance of not leaving money on the table by pricing their IPO too low, while not pricing their shares too high, which could lead to weak beginnings of negotiation. Meanwhile, both companies are hoping (and betting on) the IPO window will stay open early next year.
A sharp correction in the stock market can occur at any time, closing the IPO window, as it is not an ideal environment for a private company to go public.
BlackRock CEO Larry Fink says the recent IPO frenzy is “unsustainable” and could lead to “many accidents”.
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