Shares of online credit card company Nextcard (Nasdaq: NXCD) climbed nearly 30 percent on Wednesday, rising 9-3/8 to 41 after the company announced a five-year agreement with Amazon.com. Under the terms of the deal, the companies will issue a joint credit card. Shares of Amazon gained 1 3/16 to 72 on Wednesday.
The deal seems like a natural fit for Nextcard, clearly the online credit-card leader, and Amazon.com, the top e-commerce site. Amazon.com is expected to generate about $150 million in revenues from the deal, but the bigger winner might actually be Nextcard, which can now tap into Amazon.com’s base of more than 13 million customers. After the news was announced, Donaldson, Lufkin & Jenrette reiterated its buy rating and $70 price target on Nextcard.