Why the Afterpay (ASX:APT) and Zip (ASX:Z1P) share prices are under pressure again

While investors might be hoping for an Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P0 share price bounce. The sell down might continue.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Afterpay Ltd (ASX: APT) and  Zip Co Ltd (ASX: Z1P) share price performances have gone from bad to worse after both buy now, pay later (BNPL) giants have lost more than 35% in value since mid-February.  

The Zip share price is still up ~51% year-to-date, while Afterpay has dipped into negative territory and down 13% for the year. 

Just as you think the pain might be over, today looks to be shaping up to be another tough session for Afterpay and Zip shares. 

US tech shares under fire 

Rising bond yields continued to threaten richly valued tech and growth sectors overnight. Benchmark US government yields hit a one-year high of 1.60% despite the US being close to passing its US$1.9 trillion stimulus package. 

The Nasdaq Composite (NASDAQ: .IXIC) slumped 2.41% while the S&P 500 Index (SP: .INX) was down only 0.54% and the Dow Jones Industrial Average Index (DJX: .DJI) finished the session 0.97% higher. 

More notably, leading US-listed BNPL giant, Affirm Holdings Inc (NASDAQ: AFRM) closed 8.42% lower at US$74.31. This brings its shares to a new all-time low after listing on 13 January 2021 at an IPO offer price of US$39. Its shares hit a peak of US$146.90, a 275% return for those that managed to participate in the IPO. Conversely, those that bought Affirm shares at its peak would also find a 50% hole in their pockets on current prices. 

The Affirm share price reflects a similar sell-off narrative as the ASX-listed BNPL shares. Affirm shares peaked on 10 February, a similar timeline to Afterpay and Zip shares, which began to plateau around the same time. 

Why are the Afterpay and Zip share prices still falling? 

Despite being competitors, the Affirm, Afterpay and Zip share price largely move in tandem. 

The broader weakness across US tech shares combined with Affirm's 8.42% slump and inability to bounce off lows has translated into a weaker open for ASX-listed BNPL shares. 

At the time of writing, the Zip share price has bounced off its intraday low of $8.41 to be trading for $8.51, which is down 4.71%, while the Afterpay share price is still sitting at intraday lows, down 8.96% at $101.20 per share. 

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Fallers

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Boss Energy, Paragon Care, Treasury Wine, and Woodside shares are falling today

These shares are having a tough session on Thursday.

Read more »

an oil worker holds his hands in the air in celebration in silhouette against a seitting sun with oil drilling equipment in the background.
Share Fallers

Why ASX oil stocks Woodside, Santos and Ampol are sliding today

Oil prices have slipped below US$60 a barrel.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why DroneShield, Graincorp, Treasury Wine, and Woodside shares are sinking today

These shares are having a tough time on hump day. But why?

Read more »

Man with a hand on his head looks at a red stock market chart showing a falling share price.
Share Fallers

Why AIC Mines, ASX, Karoon Energy, and Life360 shares are falling today

These shares are falling more than most on Tuesday. But why?

Read more »

Bored man sitting at his desk with his laptop.
Share Fallers

Why ASX, CSL, Galan Lithium, and NextDC shares are dropping today

These shares are starting the week in the red. Let's find out why.

Read more »

Bored man sitting at his desk with his laptop.
Share Fallers

Why Austal, Fenix Resources, Metcash, and Polynovo shares are falling today

These shares are ending the week in the red. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Chalice Mining, Predictive Discovery, Premier Investments, and St Barbara shares are sinking today

These shares are missing out on the good time on Thursday. But why?

Read more »

Frustrated and shocked business woman reading bad news online from phone.
Share Fallers

Why Cogstate, European Lithium, GQG Partners, and Lindian Resources shares are falling today

These shares are having a tough time on hump day. But why?

Read more »