Why is the Afterpay (ASX:APT) share price soaring 5% today?

Investors have gone back to buying Afterpay shares now…

A happy woman stands outside a building looking at her phone and smiling widely

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 S&P/ASX 200 Index (ASX: XJO) is having a pretty dreary hump day so far this Wednesday. At the time of writing, the ASX 200 is down by 0.25% after initially rising this morning. And that is making the Afterpay Ltd (ASX: APT) share price look especially pleasing today.

Afterpay shares are currently up a very healthy 5.3% at $87.38 each after closing at $82.89 yesterday and opening at $88 this morning. So why is this buy now, pay later (BNPL) pioneer faring so well compared to the broader market?

Well, the first thing to note is that it has been a rough period for Afterpay shares lately. Only yesterday, the company hit a new 52-week low of $80.20 a share, the lowest pricing Afterpay has seen since October 2020. It's possible that today's gains are a result of investors trying to 'find a bottom' for Afterpay shares.

Afterpay share price bounces off 52-week low

But we also can't look past the overnight performance of Block Inc (NYSE: SQ). Block, or Square, as it used to be known, is currently in the process of acquiring Afterpay in full. Back in August, both companies announced the pending nuptials, with Afterpay shareholders set to receive 0.375 shares of Block for every Afterpay share held in an all-scrip deal. Since the offer amount is set at a fixed ratio of block shares, this inherently tied the Afterpay share price to that of Block.

Well, surprise, surprise, the Block share price also had a strong night overnight on the US markets. The payments giant was up a very pleasing 7.7% overnight to US$170.47 a share. This comes after Block hit a new 52-week low of its own this week (US$157.57).

With Block shares rising 7.7% overnight, this also means that the takeover offer on the table for Afterpay just increased by 7.7% in value as well. So this is the likely reason why we are seeing such a strong rise in the Afterepay share price today.

But it probably wouldn't be hurting that ASX tech shares across the board are also in the green today. The S&P/ASX All Technology Index (ASX: XTX) is currently up by 1.2%. And other major ASX tech shares like Xero Limited (ASX: XRO) and WiseTech Global Ltd (ASX: WTC) are also enjoying strong days.

At the current Afterpay share price, this ASX 200 BNPL share has a market capitalisation of $25.37 billion.

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., WiseTech Global, and Xero. The Motley Fool Australia owns and has recommended AFTERPAY T FPO, WiseTech Global, and Xero. 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

Rocket powering up and symbolising a rising share price.
BNPL shares

$10,000 invested in Zip shares in April is now worth…

Investors who followed Warren Buffett’s advice and bought Zip shares in April won’t be regretting that today.

Read more »

Business people discussing project on digital tablet.
BNPL shares

$10,000 invested in Zip shares in FY 2025 is now worth

Let's see how this payments company's shares performed in the last financial year.

Read more »

a woman with lots of shopping bags looks upwards towards the sky as if she is pondering something.
BNPL shares

Why this fund manager remains bullish on Zip shares

Zip shares have surged 90% over the past year.

Read more »

A cool dude looks back at the camera while ziplining above the treetops.
BNPL shares

Zip share price rockets 19% on full-year earnings upgrade

Surging again today, Zip shares are now up 127% since their recent April lows.

Read more »

a young woman looks happily at her phone in one hand with a selection of shopping bags in her other hand.
BNPL shares

Up 87% since April, why the Zip share price can keep flying higher into 2026

A leading fund manager expects more outsized gains from Zip shares ahead.

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Share Gainers

Guess how much $10,000 invested in Zip shares on 7 April is worth today!

The rebound in the Zip share price since 7 April has been nothing short of remarkable.

Read more »

Frustrated and shocked business woman reading bad news online from phone.
BNPL shares

Why is the Zip share price dropping today?

Let's see how this buy now pay later provider performed in April.

Read more »

A young woman smiles as she rides a zip line high above the trees.
BNPL shares

How Zip shares rebounded 45% from their 7 April lows to beat the ASX 200

Did you catch what happened with Zip shares in April?

Read more »