Shares of buy-now pay-later (BNPL) company Affirm Holdings Inc. AFRM, +15.43% are surging more than 18% in Monday trading after Square Inc. SQ, +11.78% announced its plans to purchase BNPL rival Afterpay Ltd. AFTPY, +38.18% APT, +18.77% for a 31% premium in a vote of confidence for the payment trend. The deal is valued at $29 billion. Afterpay and Affirm are among companies offering financial technology that lets consumers split their purchases into installments in a break from the traditional credit-card model of compounding interest. Some BNPL products are interest-free, while others carry simple interest. Affirm’s stock “will now include an M&A premium,” Bernstein’s Harshita Rawat wrote in a note to clients. In her view, the deal announcement translates to a negative read for PayPal Holdings Inc. PYPL, -1.09%, which also has expanded into BNPL and is seeing a 0.2% drop in its stock during Monday’s session. She saw a positive read through for Marqeta Inc. MQ, +0.45%, which works with both Afterpay and Square on debit-based products, though Marqeta shares are off 0.4% in Monday trading.
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