If you invested $10,000 in the Afterpay IPO, this is how much you'd have now

If you invested in the Afterpay Ltd (ASX:APT) IPO you would have generated exceptionally strong returns. Here's how strong…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

On Wednesday I looked at how a $10,000 investment in the CSL Limited (ASX: CSL) IPO in 1994 would have fared. Spoiler alert, you'd be very wealthy now.

Today I thought I would turn my attention to fellow market darling, Afterpay Ltd (ASX: APT).

The buy now pay later provider hasn't been listed on the Australian share market anywhere near as long as CSL, but it certainly has achieved a lot during this time.

For example, here's me fawning over Afterpay in July 2016 when it was just starting to gain traction with a handful of retailers in Australia.

Fast-forward to its recent business update and Afterpay now has a total of 48,400 merchants on its platform. This comprises 38,600 merchants in the ANZ market, 9,100 in the U.S. market, and 600 in the UK.

In addition to this, there are now a whopping 8.4 million active customers transacting through its platform globally. A sizeable 4.4 million of these are in the U.S. market.

The Afterpay IPO.

Afterpay has been listed on the Australian share market for just a touch over four years. Its shares landed on the ASX boards on May 4 2016 for $1.00 per share. This gave it a market capitalisation of $125 million.

This means that a $10,000 investment in its IPO would have yielded you 10,000 shares.

And although the company has merged with Touchcorp since then, Afterpay shareholders were given one share in the new entity for every share they already owned. So this figure remains the same.

Today the payments company's shares are changing hands for $43.46, which implies a market capitalisation of approximately $11.6 billion.

This means that those 10,000 shares now have a market value of $434,600. I think you'll agree that this is a stunning return on investment in just four years.

And given its strong growth potential, I wouldn't be in a hurry to cash in these shares just yet. Especially if Tencent Holdings opens the door to the Asia market for it in the future. Combined with its other expansion opportunities in North America and Europe, the future looks very bright for this star stock.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on How to invest

A group of young ASX investors sitting around a laptop with an older lady standing behind them explaining how investing works.
How to invest

Why it's a stock picker's market and how to maximise your returns

It pays to be selective in 2025.

Read more »

Person handing out $100 notes, symbolising ex-dividend date.
How to invest

How $500 a month in ASX shares could make you wealthy

Investing consistently could be the key to becoming rich in the future. Here's how.

Read more »

A woman in hammock with headphones on enjoying life which symbolises passive income.
How to invest

A new age: What safe-haven investments look like in 2025

Looking beyond the traditional definition.

Read more »

Smiling woman with her head and arm on a desk holding $100 notes out, symbolising dividends.
How to invest

How to earn $1,000 a month in passive income from ASX shares

Want a wage from the share market? Here's how to do it.

Read more »

Male hands holding Australian dollar banknotes, symbolising dividends.
How to invest

How to build a $250,000 ASX share portfolio by 2035

Here's how you could potentially reach $250k from zero in just a decade.

Read more »

A businesswoman weighs up the stack of cash she receives, with the pile in one hand significantly more than the other hand.
How to invest

How I'd build a $20,000 annual passive income stream from these top ASX 200 shares

To earn $20,000 a year in passive income, I’d start with these three ASX 200 shares.

Read more »

a smiling picture of legendary US investment guru Warren Buffett.
How to invest

Life after Warren Buffett: other successful investors still in the game worth following

With Warren Buffett retiring it’s time to look at some other investors delivering solid returns.  

Read more »

An older woman gazes over the top of her glasses with a quizzical expression as if she is considering some information.
How to invest

How to build an ASX ETF portfolio to match your risk profile

Time for a portfolio review?

Read more »