Fintech GreenSky surges 53% on Goldman Sachs acquisition Deal

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There were a few companies that top the list of Wednesday’s top movers, but many investors managed to miss out on. In particular, one stock that skyrocketed on Wednesday happened to be a company that many traders missed out on. The stock being referred to here is GreenSky (NYSE: GSKY), whose market cap exploded over the course of the day following a prestigious deal with Wall Street giant Goldman Sachs (NYSE: GS).

GreenSky is one of many fintech companies out there that’s providing “buy now, pay later” type of services to customers. Similar to how ordinary people use credit cards and pay off their balance in installments, these types of services are already being incorporated into many online retailers around the world. In particular, GreenSky is a fintech company focused primarily on home improvement loans, an area with relatively little competition.

Goldman Sachs announced it would be completing an all-stock deal to buy out GreenSky for around $2.3 billion. Overall, the deal would add more than 10,000 merchants and potentially millions of customers to its own client-base. In a way, it signals a surprising turnaround for Goldman, which traditionally used to be the bank for the ultra-wealthy. However, with deals like these, it seems the bank is now is changing its image to appear more helpful towards the ordinary American bank user.

We have been clear in our aspiration for Marcus to become the consumer banking platform of the future, and the acquisition of GreenSky advances this goal,” said Goldman CEO David Solomon in an official press release. “GreenSky and its talented team have built an impressive, cloud-native platform that will allow Marcus to reach a new and active set of merchants and customers.”

Goldman has been discussing buying out GreenSky back two years ago, when the company was looking for a partial buyer after its stock price crashed. Although those talks ended up not working, Goldman decided to restart the sales process this year.

GreenSky also had to settle an issue with the Consumer Financial Protection Bureau, in which the organization accused the company of careless customer service practices. According to the Bureau, GreenSky had let merchants take out loans on behalf of thousands of clients that didn’t ask for those loans. All in all, GreenSky had to pay out $11.5 million in total, a paltry sum compared to its current $2.2 billion market cap.

Shares of GreenSky shot up more than 53.5% over the course of the day, making it the single best-performing stock on Wednesday. Over the past year, shares are up more than 177.4% as interesting these types of “buy now, pay later” fintech service providers quickly exploded. Now, most major companies are looking to acquire or buyout similar service providers going forward, or at least secure some type of partnership with them.

 

GreenSky Company Profile

GreenSky Inc operates as a technology company. The company offers a proprietary technology infrastructure platform to supports the full transaction lifecycle, including credit application, underwriting, and real-time allocation. Its platform caters to merchants, consumers, and banks. – Warrior Trading News

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