Afterpay Touch Group Ltd (ASX: APT) shares have been looking extra volatile recently and have been hit yet again by an ASX Price query, this time down nearly 7%.
About Afterpay
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.
ASX Price Query
Afterpay released a response this morning to an ASX Price Query questioning the 9.9% decline in the Afterpay share price on 28th June 2019.
The Afterpay share price dropped last Friday seemingly following the announcement that Visa Inc (NYSE: V) is joining the buy now, pay later space.
Afterpay points out in their response that shares of their competitors Splitit Payments Ltd (ASX: SPT) and Zip Co Limited (ASX: Z1P) also declined sharply towards the end of the trading day following Visa’s announcement.
The fact that the ASX sent a price query to Afterpay specifically may suggest to investors that regulators are watching the company very closely. Afterpay has of course also been dealing with scrutiny from AUSTRAC recently regarding their anti-money laundering/counter-terrorism financing program.
Whether Afterpay deserves this scrutiny or not is another question, but it clearly has some investors worried.
The share price may also just be declining today in a continued response to Visa’s new service. The Zip Co share price is also down around 4%, so this is entirely possible.
Looking Ahead
It’s becoming clear that Afterpay has caught the attention of multiple regulators, but no one has suggested or proven yet that Afterpay has done anything wrong, so this may not necessarily be a worry for investors.
I think the main concern for investors is more likely the volatility of the shares, which seem to be among the top movers just about every day.
Personally, I’d rather invest in one of the growth companies mentioned in the free report below.
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Disclosure: At the time of writing, Max does not own shares in any of the companies mentioned.
