Affirm, a business that helped Popularizing a “buy now, pay later” trend for internet shopping, its shares were offered to the public on Wednesday. The listing came weeks after the company withdrew its initial IPO plans due to uncertainty about the pricing of the sale.
Affirm eventually traded its shares at $ 49 under the ticker AFRM, but by noon the shares had traded above $ 100 – an increase of more than 100%.
The opening day pop recalls Airbnb’s December IPO, which saw the home-sharing company’s shares jump over 135%. In Affirm’s case, the pop is perhaps ironic as the company delayed its offer, which many saw in response to the Airbnb events.
While opening day price explosions benefit institutional investors who are dragging stocks down at their opening price, critics have seen that such pops penalize retail investors and also mean that the company’s IPO leaves money on the table.
Affirm had proposed trading its shares in the $ 33-38 range ahead of December’s abandoned listing, while news reports earlier this week predicted it would trade at $ 41-44.
The event means Affirm founder and CEO Max Levchin, who owns 27.5 million shares, will raise over $ 1 billion from the IPO and could cement his reputation as a financial visionary. Levchin is already a member of the “PayPal mafia“For his role as co-founder of the payments giant, whose early leaders built a host of other prominent companies.
In an interview with capital, Levchin repeated his well-known mantra that the credit card industry is fraudulent and immoral, and that Affirm is a way to provide credit to consumers with dignity.
“We don’t profit from mistakes and misfortunes made by our customers. The entire premise of the credit card industry is based on late fees. Deferred interest is a terrible product, ”Levchin said.
Affirm, known for its partnership with the exercise bike manufacturer Peloton, also charges interest from many of its customers when paying installments. However, the company does this in a way that Levchin says is completely transparent, so consumers can see the full cost of the payment plan, including interest, in advance.
According to a Business Insider report, Affirms interest rates reach up to 30%, although around 40% of customers pay no interest at all. Affirm also generates significant revenue from fees it charges merchants, which can be as high as 7%.
Affirm was founded in 2012 and today has over 6 million customers and offers its pay-as-you-go offer to a large number of retailers, from discounters to luxury retailers. The company recently expanded its reach through a partnership with online retail giant Shopify.
While Affirm has managed to capitalize on the popularity of the rapidly growing “buy now, pay later” trend, along with its European rival Klarna, analysts say it faces numerous challenges. These include a new competing product from Levchin’s alma mater, PayPal, as well as the prospect of merchants claiming their fees back – much like they have done against credit card companies in recent years. All of this could make it difficult for Affirm, which lost $ 112 million in its last fiscal year, to make a profit one day.
Levchin admits not to worry about such challenges, and points out that any business in a thriving market will face competition and price pressures. He also claimed that Affirm’s commitment to moral and ethical treatment of its customers will ensure its long-term success.
When asked whether Affirm’s claims that morals were nothing more than a social platitude, Levchin admitted that such lofty statements are common. But, he added, “Nobody has gone so far as to put customers first.”
Levchin said Affirm takes the same stance as a growing number of American corporations that they will not provide financial aid to politicians who tried to undermine the recent elections and US democracy.
Regarding the future of financial services, an industry he has helped shape, Levchin said the US must be the first country to “fully digitize our local currency” – a move he believes is essential to global trade to stay in the lead.
The affirm IPO marks the third time a company has gone public for Levchin, although it is the first time in the role of CEO. He was the chief technology officer at PayPal and a board member of Yelp when those companies made public debuts in 2002 and 2012, respectively.
Levchin described the IPO experience as exciting, but he’s excited for it to come to an end. “The honest truth is that the IPO itself is an adrenaline-pumping lead-up to a major reveal. But I really want to work on building this company again, ”he said.
This story has been updated to reflect Wednesday’s price action
More worth reading Financial coverage of capital:
This story was originally presented on Fortune.com