Following Its Big June IPO, Adyen Continues To Surge

Does it pay to bet on payments? If the bet is on Adyen N.V., it pays handsomely so far.

The Dutch processor and payments gateway is showing no signs of slowing down since its initial public offering nearly four weeks ago. The stock, which trades on the Euronext Amsterdam exchange, passed 500 euros per share four days ago and hasn’t looked back. Nearing the end of trading on Tuesday, it peaked at 569 euros ($667) before ending at 529.50 euros ($621).

This recent performance comes after a big opening day June 14, when the stock surprised observers by surging to a close at 438 euros. That gave the company a valuation above $15 billion, well in excess of the $2.3 billion price tag it carried as a privately held entity.

That first day of trading could have been a fluke, but what accounts for the 25% climb since then? Much has to do with a limited supply of places right now for investors who like payments plays to put their money. “A lot of capital investors are trying to [put money to] work in payments,” says Eric Grover, principal at financial-services consultancy Intrepid Ventures, Minden, Nev., in an email message.

That’s making Adyen look pretty attractive. “The supply of networks with critical mass, all of which are richly valued as well, is finite,” says Grover, who follows the company closely. “Adyen’s a distinctive multinational processing growth story in a field with many that aren’t obviously compellingly different or growing as fast [outside of] acquisitions.”

Adyen, which operates in the United States out of a San Francisco headquarters, recently won a deal to process for eBay Inc. Other major clients include Uber, Netflix, Facebook, Spotify, Etsy, Vodafone, Sephora, Tory Burch, L’Oréal, and Booking.com,

But can the company maintain this momentum, and if so for how long? Adyen could stumble, but Grover thinks the story, for the short run, at least, will be a happy one. “The market appears to believe Adyen’s growth trajectory and margins will be sustainable for a long time,” he says. “A lot of folks want of piece of the potential upside.”