Afterpay Share Price Hit Record High, What Next? (ASX:APT)

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ASX:APT - Afterpay Share Price

Today we look at the Afterpay Ltd [ASX:APT] share price, which hit a record high last week of $43.68.

This was after hitting a low of $8.01 a month and a half earlier on 23 March.

You can see the wild swing in the Afterpay share price below:

ASX APT - Afterpay Share Price Chart
ASX APT – Afterpay Share Price Chart

Source: tradingview.com

We look at what triggered its rise up the charts.

Afterpay share price rise reflects aggressive bargain hunting, Tencent move

In the chart above you can see Afterpay shares shed 80% of their value between late February and late March.

This was followed by a remarkable rise, more than 440% in a slightly longer period from the low.

Coming off the March low, it’s possible that many in the market saw this as remarkable opportunity to get into one of the ASX’s most hyped growth stocks.

Call it aggressive bargain hunting — the last chance to catch the Afterpay train.

A big jump followed on 4 May, following a 1 May evening announcement.

Tencent, a Hong Kong listed digital behemoth joined the share register as a substantial holder, it was announced.

Afterpay hailed the move as a chance to learn from the best in the digital space:

Tencent’s investment provides us with the opportunity to learn from one of the world’s most successful digital platform businesses. To be able to tap into Tencent’s vast experience and network is valuable, as is the potential to collaborate in areas such as technology, geographic expansion and future payment options on the Afterpay platform.’

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Outlook for Afterpay share price

Afterpay’s remarkable rise rewarded those who bought at the bottom of the mammoth plunge.

As such, it makes sense that the APT share price has moved sideways over the last few days of trading.

In the coming years though, the BNPL giant will likely be looking for more ways to monetise its growing customer base.

As of their last half yearly, they recorded a statutory loss of $35.8 million.

It will be intriguing to see their latest results, and assess how much the shift to online sales in the wake of the pandemic impacted the figures.

Talking to our editor Callum Newman this morning, he emphasised that the shift away from passive investing may be starting to take hold.

It may not be enough to buy an ASX ETF and watch it idly.

With some sectors underperforming, being discerning is paramount.

A stock pickers market, he calls it.

Imagine calling the bottom on the APT share price, for example.

If you want to learn about the stocks Callum reckons are resistant to the coronavirus downturn, you learn about that here.

Regards,

Lachlann Tierney,

For Profit Watch