BNPL whacked! Why the Afterpay (ASX:APT) share price is down 7% to a new 52-week low today

Afterpay investors aren't 'buying now' today…

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Much to the relief of ASX investors no doubt, the S&P/ASX 200 Index (ASX: XJO) is actually enjoying a day in the green so far this Friday.

At the time of writing, the ASX 200 is up a healthy 0.49% at 7,331 points. That may come as a reprieve to many investors, who have had to watch the ASX 200 go backwards for most of the week.

But somehow, no one told buy now, pay later (BNPL) shares like Afterpay Ltd (ASX: APT).

BNPL shares are getting whacked on the ASX boards today and poster child and pioneer Afterpay is taking the brunt of it. The Afterpay share price is currently down a nasty 7.37% and is going for $82.90 right now.

Earlier in today's session, Afterpay shares hit $81.30, which is a new 52-week low for the company. Afterpay hasn't seen that kind of pricing for its stock since early October last year.

But it's not just Afterpay. The entire ASX BNPL sector is awash with red ink today. Look at Zip Co Ltd (ASX: Z1P). Zip shares are down 6.29% to $4.17 after also hitting a new 52-week low earlier today at $4.05.

Sezzle Inc (ASX: SZL) is down 7.12% to $3. And Openpay Group Ltd (ASX: OPY) has lost 6.11% at 85 cents a share. All 4 of these BNPL shares have hit 52-week lows today.

BNPL share Afterpay hits 52-week low

So we don't need to look too far to see what's going on here. As we covered this morning, these falls come amid a new probe into the BNPL sector that has just been launched by the US Consumer Financial Protection Bureau (CFPB).

This probe is examing whether the US BNPL space needs further regulation. While only Afterpay and Zip are being targeted by this investigation, the fallout seems to be extending to other ASX BNPL shares, going by the above share price movements.

Circling back to the Afterpay share price, it wouldn't have helped that the Block Inc (NYSE: SQ) share price fell by more than 4.5% overnight as well.

Block (formerly known as Square) is the company set to acquire Afterpay in the next few months. Since Afterpay shareholders are to receive a fixed ratio of 0.375 Block shares for every Afterpay share they own, any falls in the Block share price reduces the value of this takeover for Afterpay investors.

So not a good day at all for ASX BNPL investors this Friday.

The Afterpay share price is now down more than 30% in 2021 so far.

Motley Fool contributor Sebastian Bowen owns Block, Inc. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended AFTERPAY T FPO, Block, Inc., and ZIPCOLTD FPO. The Motley Fool Australia owns 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.

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