Afterpay (ASX:APT) Share Price Rises On AUSTRAC Update


Companies and indices mentioned:


The Afterpay Touch Group Ltd (ASX: APT) share price has risen by more than 2% in early trade after providing an AUSTRAC update.

Afterpay Touch is the owner of the popular “buy now, pay later” app. As of early 2019, Afterpay had over 4 million registered users worldwide, making it one of Australia’s true technology success stories.

Afterpay’s AUSTRAC News

Afterpay has given three candidates to AUSTRAC regarding who will conduct the external audit.

The Afterpay Board has created a sub-committee which will assist and report to the Afterpay Board about the oversight and management of the external audit process, engaging with AUSTRAC and other Anti-Money Laundering and Counter-Terrorism Financing (AML / CTF) issues.

The new sub-committee will be led by non-executive director Elana Rubin.

Afterpay re-iterated it is open to working with AUSTRAC:

Afterpay recognises the important work undertaken by AUSTRAC. The company reiterates that it welcomes the opportunity to continue to work closely and constructively with AUSTRAC and will approach this formal process as an opportunity to ensure that our AML/CTF compliance is robust. Afterpay is taking the audit very seriously.”

Despite the creation of the sub-committee, the Afterpay Board will retain ultimate oversight of the AML/CTF compliance.

Afterpay’s Other Announcements

Afterpay said that following from the AUSTRAC notice, it would be in the best interests of shareholders to delay the share purchase plan (SPP) part of the capital raising for regular investors until the company has considered the final audit report and its recommendations.

However, even though Afterpay is delaying the SPP it will still be issued at the lower of $23 or the 5-day average price of Afterpay shares up to the SPP closing date.

The final point that Afterpay announced is that co-founders Anthony Eisen and Nick Molnar are fully committed to the business and are excited by the company’s potential. The two co-founders do not intend to sell any further shares during FY20.

Is Afterpay A Buy?

The Afterpay share price has performed strongly since we first learned of the AUSTRAC notice and the immediate decline at the time.

Competition seems to be rising in the buy now, buy later industry and the payments space, I’m not sure Afterpay is worth a high premium with the current issues and the potential for retailers not being satisfied by the merchant fees that are charged.

I think the growth shares in the free report below could be better priced than Afterpay.

3 tech stocks for a massive COVID-19 rebound

Amidst the COVID-19 confusion, some cloud-based companies are growing... FAST!

Meanwhile, industry researchers are valuing the entire cloud computing market at $US210 billion. If you ask me, it seems clear as day that this HUGE market is only going to get bigger in 2020 and beyond.

Our top investment analyst has just identified 3 growth stocks in a net cash position, with strong competitive forces... and obvious tailwinds at their back.

Claim your FREE investing report on our analyst's "3 best share ideas for the cloud revolution" when you create a free Rask Australia account.

Our report is 100% free and unlocks hundreds of hours of bonus content.

Simply click here to access the report.


Disclaimer and warning: This information is published by The Rask Group Pty Ltd and contains general financial advice and information. That means, the information/advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms of Service and Financial Services Guide before using this website.

At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.

Jaz Harrison

Jaz Harrison

Jaz is a keen investor who loves to thoroughly poke holes in an investment idea before it has a chance of making it into her portfolio. Jaz invests for the long-term and doesn't sweat the small stuff. She strongly believes that empowering people with knowledge is the best way for them to take charge of their finances, which is exactly the approach she takes with her own money and investments.