Afterpay share price: what drove the 4.44% rebound today
We examine the catalyst behind Afterpay’s impressive share price rebound today, January 2.
The regulatory question
It’s interesting how the exact same piece of information can drive dramatically different outcomes.
For instance, when news began to circulate the market that Sezzle (ASX: SZL) had had its application for a lending license in California denied by the Department of Business (DBO), the subsequent market reaction was severe: the Sezzle share price collapsed by as much as 18% as investors headed for the exits.
Of course, Sezzle’s own decline raised other questions, fuelled primarily by ambiguous language in the DBO’s media release on the matter.
Here, California’s Department of Business wrote:
‘In a parallel action, the DBO issued a legal opinion advising a second, unnamed lender that its point of-sale products also meet the Civil Code and case law definition of “loans” and require a CFL license.’
Some on social media speculated that Afterpay (ASX: APT) was the ‘second unnamed lender’ in question. Others theorised it was Quadpay, a New York based, buy now pay later provider.
Yet Afterpay and its ever-strong public relations team were quick to rebut such theorising.
By 10:18 AEDT the Afterpay team released a media statement confirming:
'That an Afterpay subsidiary applied for a California finance lender's license through the DBO in 2019. The DBO issued the license on 12 November 2019 and the license is valid.’
Reiterating their regulator-friendly approach to doing business, Afterpay further noted that the company:
'Regularly engages in dialogue with federal and state regulators in the US, including the DBO, to ensure that regulators understand Afterpay's products and the Company's commitment to consumer protection and compliance with applicable laws.'
The unnamed lender has yet to be found.
Afterpay share price gains ground
As the ASX 200 proved volatile, the Afterpay (ASX: APT) share price looks to have rallied off the back of this news, gaining as much as 4.82% by the afternoon session.
Interestingly, as Afterpay’s own media release notes, this is not really new news.
As the regulatory filing shows: Afterpay was granted a California Financial Lender (Main) – Lender and Broker License – to Afterpay US Services, LLC on November 12, 2019. The license status, is indeed active.
Sometimes I guess, it’s hard for markets to be fully efficient.
The Afterpay (ASX: APT) share price finished out today’s session at $30.630 per share.
Practise trading Australian BNPL stocks with an IG demo account now
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.