Why Afterpay, Alumina, Magellan, & Webjet shares are dropping lower

Afterpay Ltd (ASX:APT) and Webjet Limited (ASX:WEB) shares are two of four dropping lower on Wednesday. Here’s why…

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Downward trend

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The S&P/ASX 200 Index (ASX: XJO) is having a mixed day and is down slightly in late morning trade. At the time of writing the benchmark index is down a few points to 6,011.2 points.

Four shares that are falling more than most today are listed below. Here’s why they are dropping lower:

The Afterpay Ltd (ASX: APT) share price has fallen 1.5% to $67.02. This follows the successful completion of the payments company’s institutional placement. Afterpay raised $650 million via a placement which was strongly supported by existing and new shareholders. As a result of the support, the placement price rose to $66.00 per new share. This represents a discount of just 2.9% to its last close price and compares favourably to its underwritten floor price of $61.75 per new share.

The Alumina Limited (ASX: AWC) share price is down 5% to $1.62. This morning the company revealed that the ATO is going after the local operation of US aluminium giant Alcoa. Alumina has a 40% interest in the business. The tax office has hit Alcoa of Australia with a bill of over $900 million due to transfer pricing allegations.

The Magellan Financial Group Ltd (ASX: MFG) share price has dropped 1.5% to $63.17. This morning analysts at Citi downgraded the fund manager’s shares to a neutral rating with a $66.00 price target. Although it is a fan of the company, it appears to believe its shares are fully valued now. On Tuesday Magellan released its latest funds under management update and revealed net fund inflows of $249 million.

The Webjet Limited (ASX: WEB) share price is down 3% to $3.19. A number of travel shares have been sold off today amid concerns over the recovery of the domestic travel market. This follows the announcement of a six-week lockdown in Melbourne after a spike in coronavirus cases. These latest lockdowns will impact around five million people.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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