Why the Afterpay (ASX:APT) share price is pushing higher today

The Afterpay Ltd (ASX: APT) share price is on the move on Friday after providing an update on its US tender offer…
The post Why the Afterpay (ASX:APT) share price is pushing higher today appeared first on The Motley Fool Australia. –

Graphic illustration of buy now pay later technology overlaid on blurred photo of businessman on tablet

The Afterpay Ltd (ASX: APT) share price is pushing higher on Friday morning.

At the time of writing, the payments company’s shares are up 2.5% to $122.85.

What did Afterpay announce?

This morning Afterpay announced the successful completion of the tender offer made to eligible participants under the Afterpay US 2018 Equity Incentive Plan.

As a result of this, the company’s underlying interest in the Afterpay US business has now increased to approximately 91%. This is up from 80% at the end of the first half of FY 2021, but was a touch short of its target of 93%. This appears to be due to some US participants not taking up the tender offer.

Why is Afterpay doing this?

In February, management explained that this plan aligns with Afterpay’s objective to simplify its corporate structure while ensuring that private equity firm Matrix and US holders remain aligned with the ongoing interests and success of Afterpay as a whole.

It also believes the move will be highly strategic and accretive. Management notes that the US market represents Afterpay’s largest opportunity globally. It also currently contributes 8.1 million active customers and 43% of underlying sales.

Furthermore, management still sees a long runway for growth in the country. It notes that customer acquisition and cohort purchase frequency, together with merchant acquisition rates, bode well for continued strong medium-term growth in the US.

Is the Afterpay share price in the buy zone?

A number of leading brokers believe the Afterpay share price is in the buy zone at the current level.

One of those is Morgan Stanley. This week it put an overweight rating and $149.00 price target on its shares. This was partly due to the aforementioned US business, which it notes is expanding even quicker than it expected.

Its data appears to show that US app downloads in March were triple the number recorded a year earlier. This could be positioned Afterpay for another impressive full year result in August.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Afterpay (ASX:APT) share price is pushing higher today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!