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  5. AFRM: You had mentioned "GSY initially purchased a swap on the AFRM shares to hedge away market exposure" in response to another on GSY. [Affirm Holdings Inc.]
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Q: You had mentioned "GSY initially purchased a swap on the AFRM shares to hedge away market exposure" in response to another on GSY..Could you explain how share swaps works in this context? Thanks.

Regards,

Shyam

Asked by Shyam on October 15, 2021
5i Research Answer:

GSY owns $83.5M in AFRM stock, but has entered a derivative with a third party to take away market risk on this. The company's shares in AFRM are dependent on hitting certain profitability targets, so they cannot be sold until these are achieved within a certain time frame. GSY is essentially protecting itself here if AFRM declines.

Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in AFRM.