The Afterpay Ltd (ASX: APT) share price has taken a tumble in early trade.
Shares in the buy-now-pay-later behemoth are trading nearly 7% lower in the morning session. At the time of writing the Afterpay share price has recovered slightly, currently trading at around $120.90.
Read on to find out why the Afterpay share price is taking a dive today.
Why is the Afterpay share price falling?
Afterpay has not released any price-sensitive news to explain the bearish price action. As a result, the company’s falling share price could be investors taking profits. Shares in Afterpay have surged more than 24% in the past 2 weeks, which could be prompting investors to cash in.
In addition, Afterpay has also been on the receiving end of negative broker coverage. Last week analysts from UBS slapped a ‘sell’ rating on the Afterpay share price. Analysts cited concerns over the company’s expansion and its existing merchant partners. As a result, analysts retained a price target of $37 for Afterpay shares.
Snapshot of the Afterpay share price
As noted previously, the Afterpay share price has surged in the past 2 weeks, hitting 4-month highs.
The initial catalyst could be traced back to strength in the global tech sector. In addition, a bullish note from broker Morgan Stanley 2 weeks ago could have also prompted the rise in Afterpay’s share price.
Recently, shares in Afterpay received an extra boost after the company expanded its ‘one-time card’ for US customers. As a result, customers will be able to shop at retailers such as Amazon.com, Inc. (NASDAQ: AMZN), Nike Inc (NYSE: NKE), Target Corporation (NYSE: TGT).
According to Afterpay, these notable merchants account for almost half of all e-commerce volume in the United States. The company’s ‘one-time’ card offers users the same split payment service and is generated through the Afterpay app, allowing customers to use it at checkout.