Afterpay (ASX:APT) share price: Is a US listing a game changer?

Will the Afterpay Ltd (ASX: APT) share price head higher if it lists on the US markets? Here’s a breakdown of Afterpay’s new frontier

| More on:
Afterpay share price SquarePaypal credit card ASX shares Afterpay share price asx buy now pay later shares such as zip and afterpay share price represented by finger pressing pay button on mobile phone

Image source: Getty Images

The Afterpay Ltd (ASX: APT) share price has been an interesting performer today. Afterpay shares opened a substantial 2.4% higher this morning at $129.09 a share, only to rapidly give up those gains soon after. At the time of writing, Afterpay shares are $126.02, down 0.14% for the day.

Even so, that share price still leaves the buy now, pay later (BNPL) pioneer more than 24% higher in April so far.

So why did Afterpay shares spike this morning? Well, as we covered earlier today, the company released an impressive update for the quarter ending 31 March 2021. Afterpay reported sales growth of 123% over the quarter, including an eye-watering 2,211% jump in US sales. active customer numbers also rose 75% to 14.6 million.

However, one of the biggest announcement had nothing to do with growth numbers at all. Afterpay is now considering a listing on the US markets. Here’s some of what the company had to say on the matter:

Afterpay is currently working with external advisors to explore options for a US listing given the US market is now the largest contributor to our business and is expected to continue to grow strongly... While Afterpay intends to remain an Australian headquartered company, our shareholder base is increasingly becoming more globally focused. A US listing would further accommodate this growing interest.

Are Afterpay shares coming to America?

So will a US listing, if it does indeed occur, boost the Afterpay share price to new heights?

Well, there’s a good chance it will, at least temporarily. The ASX is a relative minnow compared to the whale that is the American market. According to the ASX, the Australian share market has a rough market capitalisation of $2.31 trillion (US$1.8 trillion), as of 31 March 2021. By comparison, a report from Siblis Research estimates the market cap of the combined US markets at US$49.11 trillion ($63.07 trillion).

In other words, there’s a lot more money sloshing around across the Pacific than on the ASX. It’s conceivable that a hip, trendy company like Afterpay would find some considerable interest in the US markets. Especially considering its healthy US expansion.

Now, this might not be as much of a gamechanger as it initially might seem. As an ASX 20 company, Afterpay has long reached the size where it would be on the radar of US fund managers. Especially considering its inclusion in the MSCI Australia Index last year.

Nevertheless, it’s hard to see a US listing being detrimental to Afterpay’s share price. Perhaps Afterpay will join that other emblem of Aussie tech – Atlassian Corporation (NASDAQ: TEAM) – in showcasing what kind of tech companies Australia can produce on the world’s largest market. We’ll have to wait and see, so watch this space!

Wondering where you should 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 could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Atlassian. 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.

More on BNPL shares