Afterpay's rocky few days vindicated by broker reports, shares up 3.6%
Friday, 7 June 2019 Afterpay Touch Group Ltd (ASX:APT) has had a bumpy ride this week hitting a low of $22.27 on Tuesday and a high of $25.20 yesterday (Thursday). On Wednesday, the company released a media statement via its website revealing it had reached 1.5 million customers and 3,300 retail partners in the US within the first year of launch. This news circulated and was likely responsible for the increase in the share price from around $23.20 to as high as $24.50 on Wednesday afternoon. Business update pre-market Thursday gets mixed response Pre-market Thursday morning, Afterpay released a business update via the ASX giving further details on the US growth, and general trading activity. Shares ran up 5.4% in the first minute of trade, however, but within twenty minutes, all gains had been wiped out and the stock was down on the day. It eventually bottomed out at $22.96 around midday on Wednesday before recovering some of the losses to finish at $23.45, down 1.9% on the day. Market commentary suggested the reason for the sharp selloff was commentary on page 5 regarding anti-money laundering and counter-terrorism compliance. READ: Buy-now, pay-later stocks Afterpay and Zip Co hitting new all-time highs Yesterday and last night, research analysts covering the stock used this latest trading information to update their models and price targets. It is likely that today’s trading represents the consensus amongst brokers remains positive with the stock trading well above Thursday’s close. READ: Afterpay expands market reach of ‘buy now, pay later’ service As per yesterday’s update, Afterpay has over 4.3 million active customers and about 30,600 active retail merchants on-boarded. Afterpay earns revenue from retail merchants by providing their customers with a buy-now, pay-later option. Customers pay back their purchase price interest-free unless they are late in which case they incur a late payment fee which is also a source of revenue for the company.
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