Afterpay’s share price has been performing well over the last year, particularly over the last four months as its value has been climbing. On Tuesday, 12 June shares were $8.44, by Thursday, 12 July its value had risen to $10.85, and in the next month shares increased to $15.10, before peaking at $21.13.
despite this shares of Afterpay Touch Group Limited [ASX:APT] are currently trading at $16.61, a slip of 2.58% from yesterday’s close.
Afterpay’s share price might be at risk on the back of SPP
As previously announced Afterpay gave eligible Australian and New Zealand shareholders the ability to partake in its Share Purchase Plan (SPP).
While it’s optional it does comes with some conditions. Firstly, shares must have been held on Wednesday, 22 August 2018, and shareholders wishing to participate must have addresses registered on the share register as either Australia or New Zealand. Shareholders in Australia and New Zealand cannot act on account of or to the benefit of a person in the United States, or be living there themselves.
Afterpay also assumed placement of fully paid ordinary shares to institutional and professional investors, which raised $117 million in placement.
The profits from the placement will go towards financing Afterpay’s international expansion strategy, as well as cornerstone international debt funding facilities.
The upside of SPP to investors is that it gives shareholders the chance to increase holdings of fully paid ordinary shares in Afterpay.
The SPP is currently open but is expected to close next week on Monday, 17 September 2018, where shares will then begin trading the next day.
The risk of applying for SPP for shareholders is that the market price of Afterpay shares is subject to change, meaning there’s the possibility that Afterpay’s market price at the time the SPP shares are issued could be less than the SPP issue price.
What investors can learn from Afterpay
If investors have learnt anything from Afterpay’s share price trading history, then they know that even when it looks like things can’t trade any higher, they can.
On the upside, Afterpay will be available in Kmart early next week, which is a positive development for the company.
But past performance is not always a prediction for future performance, so investors should keep this in mind, particularly with the sometimes volatile nature of new tech stocks.
For Money Morning
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