The Block share price is down 15% this week. What's going on?

Investors have been hitting the sell button on this leading ASX 200 BNPL share.

| More on:
A businessman carrying a briefcase looks at a square peg or block sinking into a round hole.

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 Block Inc (ASX: SQ2) share price is taking a tumble today.

Again.

At time of writing on Friday, shares in the global S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) stock – which acquired Afterpay in January 2022 – are trading for $71.16 apiece.

That's down 2.9% in intraday trading. And it puts the Block share price down 15.4% from last Friday's closing price of $84.11 a share.

For some context, the ASX 200 is down 3.6% over the week.

Created with Highcharts 11.4.3Block PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

So, why is this leading ASX BNPL share getting walloped?

Why is the Block share price getting hammered?

There's been no price-sensitive news out from the ASX BNPL stock this week.

However, it's worth noting that Block shares are dual-listed. And the stock fell 4.1% on the NYSE overnight. With one day of trade left to go in US markets, the Block share price is already down 14.8% on the NYSE for the week.

On Tuesday, which saw the BNPL stock close the day down 4.5%, Motley Fool analyst James Mickleboro noted one potential headwind:

The CEO of its key Square business, Alyssa Henry, will leave the company at the start of next month. Jack Dorsey, the company's Head and Chairperson, will take on the role of Square CEO.

But there are more headwinds than that management changeover.

Tech shares and any loss-making companies have been particularly hard hit this week.

That comes as investors are beginning to wake up to the reality that leading global central banks will likely keep interest rates higher for longer than most analysts have been forecasting.

While interest rates might not rise much further from here, high rates for another year or more will see the increased cost of debt repayments continue to drag on stocks holding a lot of debt.

In its quarterly update last month, Block reported a net loss of US$123 million for the three months.

And in a high interest rate environment, loss-making stocks priced with future growth in mind tend to get sold off.

Despite some strong monthly performance over the past year, the Block share price is now down 15% over 12 months.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Block. The Motley Fool Australia has positions in and has recommended Block. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on BNPL shares

Business people discussing project on digital tablet.
BNPL shares

$10,000 invested in Zip shares in FY 2025 is now worth

Let's see how this payments company's shares performed in the last financial year.

Read more »

a woman with lots of shopping bags looks upwards towards the sky as if she is pondering something.
BNPL shares

Why this fund manager remains bullish on Zip shares

Zip shares have surged 90% over the past year.

Read more »

A cool dude looks back at the camera while ziplining above the treetops.
BNPL shares

Zip share price rockets 19% on full-year earnings upgrade

Surging again today, Zip shares are now up 127% since their recent April lows.

Read more »

a young woman looks happily at her phone in one hand with a selection of shopping bags in her other hand.
BNPL shares

Up 87% since April, why the Zip share price can keep flying higher into 2026

A leading fund manager expects more outsized gains from Zip shares ahead.

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Share Gainers

Guess how much $10,000 invested in Zip shares on 7 April is worth today!

The rebound in the Zip share price since 7 April has been nothing short of remarkable.

Read more »

Frustrated and shocked business woman reading bad news online from phone.
BNPL shares

Why is the Zip share price dropping today?

Let's see how this buy now pay later provider performed in April.

Read more »

A young woman smiles as she rides a zip line high above the trees.
BNPL shares

How Zip shares rebounded 45% from their 7 April lows to beat the ASX 200

Did you catch what happened with Zip shares in April?

Read more »

A young woman in a shop hands her credit card to the cashier.
BNPL shares

Up 41% in 3 weeks, should I buy Zip shares today?

Zip shares have been on a tear in April. Now what?

Read more »