At time of writing, Afterpay Touch Group Limited [ASX:APT] are trading at just $15.05, marking a 5.93% decrease from yesterday’s figures.
In fact, the past week and a bit has seen a steady drop in Afterpay’s share price, showing an astounding 28.8% drop since last Monday’s trading price of $21.13.
Before then, Afterpay was seeing a consistent rise in their share price. The infotech company’s innovative approach to a ‘lay-by-like’ purchasing system has fast become an Aussie hot topic of the tech-innovation boom.
Where is the drop coming from?
Since there’s been no announcements on the ASX since the beginning of this decline, it is likely in response to the rough week of tech trading on the US stock exchange.
Recent scepticism over the integrity of big social media players like Facebook and Twitter have led to a US Congress hearing to determine the preventative action these companies are willing to place against perceived ‘hate speech’ on their platforms.
Such controversy has likely deterred potential investors into the tech-stock market, who see the sector riddled with privacy violations and manipulative propaganda.
This uncertainty appears to have spread into our own ASX, with a lot of our hottest listed tech stocks — like Telstra and Dreamscape — feeling the blow.
Quitting while we’re ahead
On the flip side, this drop in Afterpay’s share price may be a result of their existing investors making big on the uptrend of the stock.
Since late May 2018, the company’s stocks have been steadily climbing. In three months, shares have almost tripled in value.
But with an unsteady US market and the looming threat of another global financial crisis approaching, shareholders appear to be taking profits while they’re up for grabs.
What this could mean for Afterpay
Only time will tell whether the US tech market share drop will correct itself. Hopefully, if and when it does, Afterpay shares are likely to mirror the pattern.
Otherwise, with no sign of significant structural changes to the company, and promising FY18 figures to rest on, there’s no reason why Afterpay cannot bounce back from this recent hurdle.
For Money Morning
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