WSJ did not give a definitive reason for the delay in Affirm Holding Inc.’s plans but suggested it may be for the same reason video game-maker Roblox also put off an imminent IPO: fear of missing out at the corporate level.
Recent IPOs from DoorDash and Airbnb touch off stampedes from investors that sent the prices of newly published shares soaring. When that happens, early investors amass wealth that could have gone to the issuing companies if they had priced shares higher at the time of the IPOs.
WSJ cited unnamed sources who said another factor in the delay of the Affirm IPO to January or later is that the federal Securities and Exchange Commission has been swamped with requests by privately-held companies to go public.
In the case of Roblox, WSJ reported company CEO David Baszucki wrote in a memo to employees: “Based on everything we have learned to date, we feel there is an opportunity to improve our specific process for employees, shareholders and future investors both big and small.”
The IPO market has been extraordinarily hot in 2020.
Affirm is a player in the buy now, pay later (BNPL) space.
The company reported in November that revenue for the fiscal year that ended Sept. 30 was up substantially year-over-year, and the net loss for the same period shrank.
When the company filed for the just-postponed IPO in November, Founder Max Levchin said: “We believe by using modern technology, the very best engineering talent and a mission-driven approach, we can reinvent the payment experience. … Legacy payment options, archaic systems, and traditional risk and credit underwriting models can be harmful, deceptive, and restrictive to both consumers and merchants.”
Levchin was a co-founder of PayPal.