Why did the Block (ASX:SQ2) share price sink 9% today?

Tech shares tumbled today…

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Key points

  • The Block share price sank 9% today
  • The S&P/ASX 200 Info Tech Index was the worst-performing sector of the day
  • Block acquired Afterpay back in February

The Block Inc CDI (ASX: SQ2) share price took a dive today, with a number of other tech shares following suit.

The S&P/ASX 200 Info Tech Index (ASX: XIJ) fell by 3.6% today, making it the worst-performing sector on the ASX. Meanwhile, the S&P/ASX All Technology Index (ASX: XTX) fell by 2.8%.

At the close of trading today, the Block share price was down 9.2% to $152.95.

So, what happened with tech shares today?

Block share price crumbles on ASX today

On Tuesday, the Block share price soared by as much as 13% despite no news from the US-based payments company. It has now given back those gains and is finishing the week down 0.5%.

Block is the company that acquired ASX market darling Afterpay. The buyout took close to six months to complete and was finalised on 1 February.

Not long after the acquisition, Block released its financial results for FY21. In it, the company announced a 62% increase in year-on-year gross profits and a substantial increase in net revenue and net income.

Since listing on the ASX on 20 January, the Block share price has dropped by 13%.

ASX tech shares slip

Last night, the NASDAQ index dropped and futures contracts are indicating there will be more of the same tonight, as my fellow Fool James reported here.

Alongside Block, other tech share prices that were shredded today include Zip Co Ltd (ASX: Z1P). The Zip share price closed at $1.72, down 8% for the day. Sezzle Inc (ASX: SZL) shares fell by 6.8%.

Zip recently announced its acquisition of Sezzle, which will require a capital raise to complete. Zip completed its institutional placement on Tuesday. A Share Purchase Plan will follow in due course.

Since Zip announced its plans, its shares have dropped by 14% (since exiting its trading halt on 1 March).

In times of market uncertainty, ASX investors tend to see tech shares as riskier and gold stocks as a safe haven. As my fellow Fool Bernd reports, the price of gold is soaring due to increasing inflation and geopolitical instability following Russia's invasion of Ukraine. This is supporting ASX gold shares.

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