Afterpay (ASX:APT) share price sinks 5% to new 52-week low

Afterpay’s shares continue to fall…

| More on:
shocked man looking at laptop with declining arrows in the background showing a falling share price

Image source: Getty Images

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.

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.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited, Block, Inc., and CSL Ltd. The Motley Fool Australia owns and has recommended Afterpay Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on 52-Week Lows

Zip share price Z1P A wide-eyed man peers out from a small gap in his black zipped jumper conveying fear over the weak Zip share price
52-Week Lows

Is the Zip share price set to hit another unhappy milestone this week?

Could the Zip share price slide below 90 cents?

Read more »

A man in business suit wearing old fashioned pilot's leather headgear, goggles and scarf bounces on a pogo stick in a dry, arid environment with nothing else around except distant hills in the background.
52-Week Lows

The Novonix share price just rebounded 13%. Is it a buy?

Novonix has had a very volatile day. Is the company worth buying?

Read more »

A man leaps from a stack of gold coins to the next, each one higher than the last.
Technology Shares

Why did the Xero share price just rebound 6%?

Xero shares have recovered from a 52-week low and are now in the green.

Read more »

Woman disappointed at share price performance with her hands on her face.
Technology Shares

Xero share price slumps to lowest price since 2020. Broker tips 50% upside

Xero shares have been exploring new depths today...

Read more »

A woman holds a piece of pizza in one hand and has a shocked look on her face.
52-Week Lows

The Domino’s share price just hit a 52-week low. Is it time to tuck into some?

Domino’s shares are down another 4%. Is the pizza business a buy?

Read more »

a person zips their jumprer completely over their head, covering their face and holds a hand to their head as if in despair.
BNPL shares

Zip share price slides another 5% to new multi-year low of $1

Wednesday was a rough day for Zip shares.

Read more »

Red arrow going down, symbolising a falling share price.
52-Week Lows

Is this opportunity knocking? 3 ASX shares hitting 52-week lows today

The All Ords is down and a bunch of ASX shares have hit 52-week lows. We profile three of them.

Read more »

a woman looks distressed as she stares dramatically at her phone watching the Megaport share price crashing today
Technology Shares

Here’s why the Megaport share price is tumbling 18% today

Top line growth was consistent throughout the quarter but ASX investors aren't impressed.

Read more »