It hasn’t been a good morning for the BNPL giant
The post Afterpay (ASX:APT) share price tumbles nearly 7% appeared first on The Motley Fool Australia. –
The Afterpay Ltd (ASX: APT) share price has taken a tumble in early trade.
Shares in the buy-now-pay-later behemoth are trading nearly 7% lower in the morning session. At the time of writing the Afterpay share price has recovered slightly, currently trading at around $120.90.
Read on to find out why the Afterpay share price is taking a dive today.
Why is the Afterpay share price falling?
Afterpay has not released any price-sensitive news to explain the bearish price action. As a result, the company’s falling share price could be investors taking profits. Shares in Afterpay have surged more than 24% in the past 2 weeks, which could be prompting investors to cash in.
In addition, Afterpay has also been on the receiving end of negative broker coverage. Last week analysts from UBS slapped a ‘sell’ rating on the Afterpay share price. Analysts cited concerns over the company’s expansion and its existing merchant partners. As a result, analysts retained a price target of $37 for Afterpay shares.
Snapshot of the Afterpay share price
As noted previously, the Afterpay share price has surged in the past 2 weeks, hitting 4-month highs.
The initial catalyst could be traced back to strength in the global tech sector. In addition, a bullish note from broker Morgan Stanley 2 weeks ago could have also prompted the rise in Afterpay’s share price.
Recently, shares in Afterpay received an extra boost after the company expanded its ‘one-time card’ for US customers. As a result, customers will be able to shop at retailers such as Amazon.com, Inc. (NASDAQ: AMZN), Nike Inc (NYSE: NKE), Target Corporation (NYSE: TGT).
According to Afterpay, these notable merchants account for almost half of all e-commerce volume in the United States. The company’s ‘one-time’ card offers users the same split payment service and is generated through the Afterpay app, allowing customers to use it at checkout.
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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.