Block (ASX:SQ2) shares are now trading on the ASX

Block has arrived on the ASX…

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The S&P/ASX 200 Index (ASX: XJO) has welcomed its latest addition this morning. At 11am AEST, the Block, Inc. (ASX: SQ2) share price started to trade on the Australian share market on a deferred settlement basis.

This follows the completion of its takeover of Afterpay Ltd (ASX: APT) and the removal of the buy now pay later provider's shares from the ASX boards at the close of play on Wednesday.

The Block share price is currently trading at $176.28. This follows a morning peak of $178.88 and a low of $176.08.

How is the new Block share price decided?

The new SQ2 CDIs on the ASX represent shares of Square Class A common stock at a ratio of 1 for 1.

This means that they are worth the same as the NYSE-listed Block shares, adjusted for current exchange rates.

This isn't a new phenomenon. ResMed Inc (ASX: RMD) shares have traded as CDIs on the Australian share market for years, though they have a different ratio.

Overnight the Block share price in New York closed at US$128.14. This equates to $177.50 at current exchange rates, which means its ASX listed shares are trading at a slight discount to their US equivalents. But this is largely to be expected given exchange rate risks and Block's ongoing slide.

Is this a buying opportunity?

The team at BTIG research in the United States appear to see this as a buying opportunity.

It currently has a buy rating and very ambitious US$320 price target on Block's US shares. This equates to a price target of $442 for its ASX listed shares, which implies more than 135% upside over the next 12 months.

Time will tell if it gets there.

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 and Block, Inc. The Motley Fool Australia owns and has recommended Afterpay Limited. The Motley Fool Australia has recommended ResMed Inc. 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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