Afterpay (ASX:APT) share price sinks 5% to new 52-week low

Afterpay's shares continue to fall…

| More on:
A shocked man sits at his desk looking at his laptop while talking on his mobile phone with declining arrows in the background representing falling ASX 200 shares today

Image source: Getty Images

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

The Afterpay Ltd (ASX: APT) share price has continued its poor run on Wednesday.

In morning trade, the buy now pay later (BNPL) provider's shares have dropped a further 5% to a new 52-week low of $79.80.

This means the Afterpay share price is now trading 50% lower than its 52-week high of $160.05.

Why is the Afterpay share price falling today?

As readers will be aware, Afterpay shareholders recently voted in favour of the takeover proposal from Block (previously named Square).

However, unlike the recent acquisition of Vifor Pharma for $17 billion in cash by CSL Limited (ASX: CSL), Block's takeover of Afterpay is an all-scrip affair. This means that the overall value of the transaction is not fixed and will rise and fall with the Block share price.

And unfortunately for Afterpay shareholders, the Block share price has been falling hard in recent months. So much so, the value of the takeover proposal has dwindled from $39 billion originally to $24.7 billion.

What's happening with the Block share price?

Overnight the Block share price dropped as much as 8% to a 52-week low of US$151.02 before recovering to be down 4.5% to US$156.33.

This means its shares have now lost 37% of their value in the five months that have passed since announcing the takeover deal.

There are a number of reasons for this. One of the most recent catalysts has been concerns about potential regulatory scrutiny in the BNPL sector in the United States.

What's next for Afterpay's shares?

In the not so distant future the Afterpay share price will no longer be trading on the Australian share market.

Once the Block transaction completes, shareholders will receive 0.375 shares of Block Class A common stock for each Afterpay share they hold. Shareholders will just have to choose whether to own US listed Block shares or Block CHESS Depositary Interests (CDIs) that will be listed on the ASX.

Whatever they choose, they will no doubt be hoping the Block share price performance improves materially hereon in.

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, Block, Inc., and CSL Ltd. The Motley Fool Australia owns and has recommended Afterpay Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on 52-Week Lows

A businesswoman exhales a deep sigh after receiving bad news, and gets on with it.
52-Week Lows

Down 68% from highs, this ASX 200 stock just hit a 4-year low. Time to pounce?

Is this beaten down stock a buy? Let's see what one leading broker is saying.

Read more »

A female Woolworths customer leans on her shopping trolley as she rests her chin in her hand thinking about what to buy for dinner while also wondering why the Woolworths share price isn't doing as well as Coles recently
52-Week Lows

Why is the Woolworths share price at its lowest point since 2020?

We haven't seen Woolies shares this low since COVID.

Read more »

A bored woman looking at her computer, it's bad news.
52-Week Lows

Why this $7 billion ASX 200 stock is falling hard today

Investors were not impressed with this company's performance during the third quarter.

Read more »

a woman looks down at her phone with a look of concern on her face and her hand held to her chin while she seriously digests the news she is receiving.
52-Week Lows

3 ASX 200 shares hitting multi-year lows while the market rallies: Time to buy?

These three ASX 200 shares are missing out on the market rally.

Read more »

Female worker sitting desk with head in hand and looking fed up
52-Week Lows

Mineral Resources shares hit an almost 4-year low. What's going on?

It's been a bad few days to own this stock...

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
52-Week Lows

Why I think this ASX penny stock is a bargain at its 52-week low

This health tech share hasn't been feeling the love from the market lately. But is there an upside on the…

Read more »

Sad looking man wearing a lion mascot, symbolising a falling Liontown share price.
Resources Shares

Liontown shares at 52-week lows as lithium slump extends further

Investors aren't buyers of the lithium share at these depressed levels.

Read more »

Piggy bank sinking in water symbolising a record low share price.
Resources Shares

BHP shares hit 52-week low! Here's what brokers say will happen next

BHP shares are now the same price as they were in January 2020.

Read more »