The S&P/ASX 200 Index (ASX: XJO) has undergone some major changes over the past month. For one, BHP Group Ltd (ASX: BHP) is now the largest share on the ASX. Now that BHP's unification program, which ended its London dual-listing, has come into effect, it has pipped Commonwealth Bank of Australia (ASX: CBA) for the top spot on the ASX. But another major change was the removal of Afterpay. So does Afterpay's departure mean that 'WAAAX' is officially dead?
Afterpay officially left the ASX boards earlier this week. This comes after the company was acquired in full by the US payments giant Block Inc (NYSE: SQ), which was formerly known as Square. In Afterpay's place, Block now has an ASX listing under Block Inc CDI (ASX: SQ2).
But this poses a question. Since Afterpay was a core member of the WAAAX group of shares, does this mean it's finally WAAAX off?
WAAAX is the acronym given to WiseTech Global Ltd (ASX: WTC), Altium Limited (ASX: ALU), Appen Ltd (ASX: APX) and Xero Limited (ASX: XRO). Afterpay, of course, makes (or made) up the final 'A'.
WAAAX on or WAAAX off?
When investors first started throwing around the WAAAX acronym a few years ago, it was arguably a response to the famous 'FAANG stocks. Those were the US tech giants that continued to give investors stellar gains over the past decade or so. Those were Facebook, now Meta Platforms Inc (NASDAQ: FB), Apple Inc (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN), Netflix Inc (NASDAQ: NFLX) and Google-owner Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL).
The companies that were to become the WAAAX shares were all home-grown ASX tech darlings that quickly all started giving investors very pleasing gains. Those were especially evident across 2017, 2018 and 2019.
But even before Afterpay's ASX departure, the wheels had arguably started to fall off the WAAAX train. If Afterpay was the only hitch here, we could perhaps move to change WAAAX to BWAAX, or perhaps WAAXB. My personal pick would be ABWAX…
But Afterpay's morph into Block isn't the only problem. Not all participants had kept the gains coming. The Altium share price is at the same level today as it pretty much was back in February 2019. Appen has faired even worse. It's down almost 80% from its August 2020 all-time high. And Xero shares haven't gone anywhere in close to 2 years either.
So perhaps WAAAX is dead for a different reason – there's arguably just not too much to gain from grouping these companies together anymore.
