The Afterpay Touch Group Ltd (ASX: APT) share price surged 5.5% higher yesterday to close at $27.14 per share – but will the growth train end for investors, or can the stock reach $30 per share in 2019?
AUSTRAC audit process draws closer
Afterpay was a top performer within the S&P/ASX 200 (INDEXASX: XJO) index yesterday after the company provided an ASX market update on "AUSTRAC Process, SPP & Co-Founder Intentions".
The company announced that it has provided the Australian Transaction Reports and Analysis Centre (AUSTRAC) with details of three candidates for conducting the external audit in line with the AUSTRAC Notice.
In mid-June, AUSTRAC ordered the company to appoint an external auditor as the watchdog raised concerns about compliance with anti-money laundering/terrorism-financing (AML/CTF) laws related to the use of Afterpay's services.
The Afterpay share price wiped off a fifth of its value in less than a week following the news, but has since recovered to $27.14 per share, with the Afterpay Board to retain ultimate oversight over the company's AML/CTF compliance.
Co-founder intentions and share purchase plan boost share price
The company also announced a share purchase plan (SPP) available to eligible shareholders, which has been deferred until after the company has considered the final audit report and recommendations from the AUSTRAC process.
The company announced an SPP share price based on the lower of the $23.00 placement price and the 5-day volume-weighted average price (VWAP) of Afterpay shares, up to the SPP closing date. The SPP will be capped at $30 million.
The final update was in relation to the intention of co-founders Anthony Eisen and Nick Molnar going forward, something that has been a source of significant share price volatility in the past.
The co-founders "remain fully committed" to the business and do not intend to sell any further shares during the next financial year (FY20), which boosted investors' confidence (and the Afterpay share price) higher in yesterday's trade.
Breaking the $30 valuation barrier
Afterpay has been a top performer on the ASX since its June 2017 IPO and the share price looks to be soaring higher still.
Despite edging closer to its $28.70 record-high, I think the AUSTRAC process might hamper the Afterpay's share price as investors remain wary of significant financial penalties, should misconduct or non-compliance be uncovered.
