Affirm Founder and CEO Max Levchin has a few things running through his veins.
First, an admirable work ethic that sees him pushing his own physical limits every day. Consider working until you drop (yes, for real, as the Levchin stories go).
And second, financial services – perhaps reminiscent of Levchin’s arrival in the United States in 1991 from Ukraine as a teenager in search of the American dream, with little money at first.
“I came to the United States as a teenager, I had no credit history, my parents had an immigration history, we didn’t own anything. And so trying to borrow money was completely out of our possibilities. And so when I got to college, I got a credit card on campus because that’s what we were doing at the time, and I quickly misunderstood how payments worked minimums and I had my FICO score trashed. So all the classic immigrant mistakes and stuff. I understand how the system works, but I needed the money. You know, I’m guilty of every one of those things.” , Levchin told Yahoo Finance Presents.
Fast forward to today.
Levchin is 46 years old. He is a husband, father of two young children, co-founder of PayPal and founder of Affirm. Despite the impressive resume — which has seen his net worth soar to more than $1.2 billion, according to Forbes — Levchin is once again trying to take the buy now, pay later (BNPL) business to the next level. through Affirm.
“I did financial services as my first real project with PayPal. I wandered in the desert for a while and came back to financial services at the request of my brilliant wife. She said you were good at a thing, go for it. I’ll probably stick to this one thing. Financial services is what I’m good at,” Levchin explained.
Affirm is now 10 years old.
The company went public in early January 2021. Shares priced at $49, then soared to $100 at the close of the first day of trading, in part due to Levchin’s strong reputation and optimism around of the booming BNPL space. At the end of November, Affirm’s stock was trading at $168 per share intraday. The company has agreements with Amazon, Apple, and Shopify.
He even revealed his desire to enter the crypto and debit card space.
Win after win seemed to pile up, eclipsing the fact that regulators were starting to scrutinize the industry’s business model. And besides, Affirm was still not profitable.
The backdrop has changed a bit so far in 2022 though.
As of the date of this article, Affirm’s stock is around $42 – well above its all-time highs north of $160 from 2021. The company’s latest quarter surprised some in the street, because the deal with Amazon will be more lucrative over time than immediately. The company also continues to invest aggressively in its business to support future growth, which continues to put pressure on results.
Affirm has done its part to keep the bull thesis intact.
The company recently raised its quarterly outlook, and Chief Financial Officer Michael Linford struck an optimistic tone in an interview with Yahoo Finance Live.
Levchin acknowledges it’s been a wild ride, but he doesn’t regret going public with Affirm. And he thinks Affirm will pay off.
“So I think it’s my responsibility and the company’s responsibility to make money. As we’re not a charity, we’ve never declared ourselves a non-profit. So I don’t want to mislead anyone into believing that we have no intention of making money.” . We really intend to make money, and hopefully a lot, and keep doing it for shareholders forever and ever. And we intend to be a stand-alone business,” says Levchin. “And right now, in terms of the vision of pure profitability, we intend to achieve sustainable break-even point, whatever you call it, and continue to invest in this business until we let’s run out of ideas. And I think some big record companies are doing just that, including Amazon. For years, Wall Street has been telling them, why aren’t you going to print dividends? Why don’t you publish , you know, profits? And I think their answer has always been, there’s a lot to do, and I need the capital to invest in that. And so that’s the plan for me as well. We can absolutely become profitable, and we certainly will.
To put a more specific point on his belief, Levchin – who has voting control at Affirm – has not sold a single share of his stock.
“I’ve never sold any stock in Affirm. In fact, I’ve bought stock in Affirm throughout the company’s history, in addition to my Founder’s Fellowship. So I’m obviously quite bullish, very bullish on my action,” Levchin added. .
Brian Sozzi is editor-in-chief and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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