The Afterpay Touch Group Ltd (ASX: APT) share price had been one of the best performers on the market on Wednesday, but it unfortunately didn't end that way.
Its shares finished the day down 19% at $11.35.
What happened?
The fintech company's shares were smashed in late trade after reports emerged claiming that payday lenders, debt management firms, and buy now pay later platforms will be the subject of a new Senate inquiry.
According to the SMH, the inquiry will focus on parts of the finance sector that have escaped the scrutiny of the Hayne royal commission.
The inquiry was given the green light after the Greens, independent Derryn Hinch, and Centre Alliance senators Rex Patrick and Stirling Griff backed Labor's proposal, meaning it will have enough votes to pass the Senate.
It wasn't just the Afterpay Touch share price that was impacted. Other shares that were hit hard include:
The Cash Converters International Ltd (ASX: CCV) share price tumbled almost 12% to 26 cents.
The Credit Corp Group Limited (ASX: CCP) share price dropped 9% to $18.85.
The Money3 Corporation Limited (ASX: MNY) share price fell 14% to $1.70.
The Zip Co Ltd (ASX: Z1P) share price fell over 12% to 93 cents.
What now?
I can't help but feel that this has been a bit of an overreaction from investors this afternoon and think this could potentially be a buying opportunity for a lot of these shares.
However, as we have seen with the banks and the aged care operators, inquiries of this nature can weigh heavily on investor sentiment and ultimately share prices. Because of this, I wouldn't necessarily expect these shares to rebound immediately.
So, for now, it might be best to keep your powder dry and wait to see how the situation develops in the coming weeks and months.
