In a rather sudden development, Afterpay Touch Group Ltd [ASX:APT] shares have tumbled dramatically today, following a positive week.
At the time of writing Afterpay’s share price is trading at $22.94, a decrease of 10.53%.
You may remember yesterday’s news, when the ‘buy now, receive now, pay later’ fintech announced a Share Purchase Plan that did not seem to faze investors. Rather than spook the market, it drove the share price higher.
But today comes an announcement of AUSTRAC ordering an external audit regarding the company’s Anti-Money Laundering/Counter Terrorism Financing (AML/CTF) program.
More on the investigation…
The company released a statement this morning revealing that they received a notice from AUSTRAC on Wednesday evening, ordering them to appoint an external auditor to carry out a compliance check. As per the request, Afterpay must identify three or more individuals that they deem appropriate to do so.
This audit will cover the period from 19 January 2015 to date, and the results are expected to be handed over to AUSTRAC within 120 days of the auditor’s appointment to the case.
The company seems to be keeping a strong face despite the hit, reiterating that they are ‘committed to meeting the high expectations of our customers and retail partners’ through several existing features of their business model. They have ‘remained consistent’ and state that they ‘have earned the trust of millions of customers that wish to use our service […]’.
And they have done so — having such a high presence both in Australia and internationally.
Not good news for Afterpay’s share price
Well, it’s not great news.
While Afterpay appear to be remaining transparent on their operations, it doesn’t seem to be comforting investors. In fact, similar companies, including Zip Co Ltd [ASX:Z1P], FlexiGroup Limited [ASX:FXL] and Splitit Ltd [ASX:SPT] have all decreased.
And as computer hacking and the stealing of assets becomes an increasingly common fear, combined with the added fear of a suffering economy, consumers may be more inclined to keep their hands in their pockets.
More to come as the story develops.
For Money Morning
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