When
Amazon.com
is involved in another company’s announcement, that tends to draw investors’ attention.
That’s exactly what happened Wednesday when ‘buy now, pay later’ company
Affirm
(ticker: AFRM) and
Amazon
(AMZN) announced that eligible U.S. merchants offering Amazon Pay can now add
Affirm
as a payment option at checkout.
Investors responded positively to the news, boosting shares of Affirm 8.3% to $17.13. So far this year, the stock has gained 77%. Amazon shares fell 3.6%.
Affirm’s adaptive checkout offers bi-weekly and monthly pay-over-time options, and the incorporation of the service can lead to an uptick in overall sales and customer loyalty, the companies said.
“Digital wallets are an increasingly critical part of the shopping experience and are expected to account for over half of e-commerce transactions worldwide by 2025,” said Libor Michalek, President of Affirm said in the release. “In addition, customers want more choice and flexibility when paying online.”
An announcement with Amazon may be just the ticket for Affirm, which last month posted a third-quarter loss that was narrower than expected but much wider than the loss recorded in the year-ago period, sending shares spiraling.
Of the analysts surveyed by FactSet in June, 28% rate it as Buy, 56% at Neutral, and 17% at Sell.
J.P. Morgan analyst Reginald Smith rates shares as Neutral.
“This is a nice win for Affirm, as it further expands the Company’s presence beyond the Amazon marketplace and, in our view, is a tacit endorsement of Affirm and its consumer-friendly policies,” Smith wrote in a Wednesday report.
Write to Emily Dattilo at [email protected]
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