Why is the Afterpay (ASX:APT) share price trailing Zip on Thursday

The BNPL giant hasn't done as well as it's peers on Thursday.

| More on:
woman thing about her payment

Image source: Getty Images

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) share price is lagging behind its peers on Thursday, up just 0.25% to $122.24.

Zip Co Ltd (ASX: Z1P) shares are currently topping the BNPL leaderboard, up 3.01% to $7.18 following its new agreement with US-tech behemoth Microsoft Corporation (NASDAQ: MSFT).

Players on the small end of town are also eking out gains ahead of the Afterpay share price.

Splitit Ltd (ASX: SPT), Openpay Group Ltd (ASX: OPY) and Laybuy Holdings Ltd (ASX: LBY) are bouncing slightly higher after yesterday's tech-heavy selloff, up 1.16%, 0.75% and 0.97% respectively.

Why the Afterpay share price is flat today

The US market is likely to blame for the underperformance of Afterpay shares.

Tech shares on Wall Street struggled to bounce back on Wednesday night with the Nasdaq Composite down 0.24% compared to the S&P 500 and Dow Jones Industrial Average which finished the session up 0.16% and 0.26% respectively.

US-listed BNPL rival Affirm Holdings Inc (NASDAQ: AFRM) opened 4.75% higher but faded towards market close, down 1.53% by the closing bell.

More importantly, the Square Inc (NYSE: SQ) share price tumbled 2.74% to a 2-month low of US$236.04.

The Afterpay share price has closely tracked the performance of Square Inc ever since the US payments company came forth with a $39 billion all-scrip takeover offer.

On the record date of Square's takeover offer, Afterpay shareholders can expect to receive a fixed exchange ratio of 0.375 Square shares for each Afterpay share they own.

After last night's performance and converting the figures back into Australian dollars, this would theoretically value the Afterpay share price at $123.09.

By comparison, the Square share price closed at $242.70 on Tuesday night which implies a theoretical value of $125.99.

With the transaction expected to close in the first quarter of calendar year 2022, the Square share price will likely continue to play a major role in how Afterpay shares perform.

Motley Fool contributor 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 and has recommended AFTERPAY T FPO, Affirm Holdings, Inc., Square, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended 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

A woman sits back and enjoys the view from a paraglider, indicating share price lifts for ASX travel and adventure shares
BNPL shares

Up 71% in 3 weeks, have Zip shares topped out?

Despite the stellar run higher, Zip shares are still trading at a fraction of their February 2021 highs.

Read more »

A woman sits on a chair smiling as she shops online.
BNPL shares

Why is the Zip share price the best-performing ASX 300 stock so far this year?

The best-performing ASX 300 stock of 2024 so far is an unlikely hero.

Read more »

A happy girl in a yellow playsuit with a zip gives the thumbs up
Share Gainers

If I'd put $5,000 into Zip shares on 9 October, here's what I'd have now!

The stars have been aligning for Zip shares.

Read more »

woman using affirm to pay
BNPL shares

Up 288% in 6 months, Zip share price tipped for more outsized gains

Zip shares have rocketed 288% in just six months.

Read more »

A businessman stacks building blocks.
BNPL shares

Up 93% since October, why are Block shares marching ahead again on Friday?

ASX 200 investors have been snapping up Block shares.

Read more »

A man wearing glasses and a white t-shirt pumps his fists in the air looking excited and happy about the rising OBX share price
BNPL shares

Zip share price up 58% in 7 trading days! What's going on?

This BNPL provider has been on fire recently. But why?

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
BNPL shares

Shares sold: Why Zip is under fire from its own shareholders

Some Zip investors had their shares sold without their knowledge.

Read more »

Sad woman with her hand on her head and holding a credit card.
BNPL shares

Zip share price tumbles 9% despite explosive first-half growth

Zip had a strong half and delivered a big improvement in key metrics.

Read more »