Afterpay’s Share Price Rises before Entering Trading Halt| ASX:APT

By ,

Today, Afterpay Touch Group [ASX:APTentered a trading halt, after announcing a capital raising.

Before the trading halt, Afterpay’s share price spiked on Thursday, trading to $25.17 before settling at $24.15 on Friday, 7 June.

The S&P/ASX 200 has opened with a rise of 102.40 points at time of writing.

Free report: Aussie stock picker, Sam Volkering (with gains as high as 1,431% in the last 18 months) reveals what he believes are his next four big potential winners.

What caused Afterpay’s trading halt

Afterpay’s capital raising announcement comes with the news that APT founders, Anthony Eisen, Nicholas Molner and David Hancock, are selling millions of shares to two US investors — Tiger Management and Woodson Capital.

Mr Eisen and Mr Molner will sell 2.05 million of their shares (keeping a remaining 2.05 million) for a combined $49.5 million. While, Mr Hancock is selling 400,000 of his shares, valued at $9.6 million.

In the announcement, Afterpay is also undertaking a full underwritten institutional placement of about 14 million new shares to raise $300 million.

The new shares have a floor price of $21.75. A share purchase plan is also being offered to raise $30 million. This is a bid to foster growth in the US market, in offering the 10% discount to the last trading price.

In their announcement today, Afterpay said: ‘Our experience to date confirms the US Scale-up opportunity is clear, supporting an accelerated investment in the global opportunity.’

The company also released its investor presentation which saw significant growth across the board, with underlying sales at approximately 4.7 billion (unaudited) in 11 months to 31 May 2019. This is up 143% since the previous period.

Afterpay’s 2019 outlook

As Afterpay continues to expand its markets globally, it’s possible that we could see further improvements to its share price.

But as competition intensifies from other ‘buy now, pay later’ service providers, we could see Afterpay’s share price increases come to a bit of a fork in the road.

Of course this hasn’t happened yet, and it might not ever happen.

More to come.

Kind regards,

Ryan Clarkson-Ledward,

For Money Morning

PS: Looking for some winners to add to your portfolio? Check out this FREE report including the five top dividend stocks on the ASX today. Click here to download.

 

About Ryan Clarkson-Ledward

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan is also the Editor…

Humm Share Price Soar on Takeover Proposals amid BNPL Rout (ASX:HUM)

Humm Group [ASX:HUM] share price is up over 20% as the buy now, pay later (BNPL) stock flags potential takeover bids.

Zip Shares Rise as Total Transaction Volume Hits $906 Million in November (ASX:Z1P)

Jittery markets sent ASX buy now, pay later (BNPL) and lithium stocks tumbling on Monday. Zip was one of the hardest hit, with share price closing 10% down.

ASX Lithium and BNPL Stocks Crater on Omicron and Interest Rate Fears

From Afterpay [ASX:APT] to Vulcan Energy Resources [ASX:VUL], BNPL and lithium stocks are under heavy selling pressure today as markets worry about Omicron and inflation.

Zip Share Price Up — Twisto Acquisition Complete (ASX:Z1P)

Zip says acquiring Twisto is an entry point to one of the world’s largest eCommerce markets, with access to all 27 member states of the European Union (EU). Zip Co [ASX:Z1P] share price is currently up 4%:

CBA Shares: First Bank to Offer BTC and Crypto in Australia (ASX:CBA)

The Commonwealth Bank of Australia (ASX:CBA) will become Australia’s first bank to offer its 6.5 million users the ability to buy, sell, and hold crypto assets via the CommBank app.

Redbubble Shares Sink on Q1 FY22 Update (ASX:RBL)

Redbubble [ASX:RBL] share price slumped after registering a 21% decline in gross transaction volume in Q1 FY22. While Redbubble said the results were in line with expectations, investors were disappointed, sending RBL shares lower.