The Afterpay Ltd (ASX: APT) share price has continued its poor run on Wednesday.
In morning trade, the buy now pay later (BNPL) provider's shares have dropped a further 5% to a new 52-week low of $79.80.
This means the Afterpay share price is now trading 50% lower than its 52-week high of $160.05.
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Why is the Afterpay share price falling today?
As readers will be aware, Afterpay shareholders recently voted in favour of the takeover proposal from Block (previously named Square).
However, unlike the recent acquisition of Vifor Pharma for $17 billion in cash by CSL Limited (ASX: CSL), Block's takeover of Afterpay is an all-scrip affair. This means that the overall value of the transaction is not fixed and will rise and fall with the Block share price.
And unfortunately for Afterpay shareholders, the Block share price has been falling hard in recent months. So much so, the value of the takeover proposal has dwindled from $39 billion originally to $24.7 billion.
What's happening with the Block share price?
Overnight the Block share price dropped as much as 8% to a 52-week low of US$151.02 before recovering to be down 4.5% to US$156.33.
This means its shares have now lost 37% of their value in the five months that have passed since announcing the takeover deal.
There are a number of reasons for this. One of the most recent catalysts has been concerns about potential regulatory scrutiny in the BNPL sector in the United States.
What's next for Afterpay's shares?
In the not so distant future the Afterpay share price will no longer be trading on the Australian share market.
Once the Block transaction completes, shareholders will receive 0.375 shares of Block Class A common stock for each Afterpay share they hold. Shareholders will just have to choose whether to own US listed Block shares or Block CHESS Depositary Interests (CDIs) that will be listed on the ASX.
Whatever they choose, they will no doubt be hoping the Block share price performance improves materially hereon in.
