In late morning trade the S&P/ASX 200 Index (ASX: XJO) is back on form and is charging notably higher. At the time of writing the benchmark index is up 1.45% to 6,040.1 points.
Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:
The Afterpay Ltd (ASX: APT) share price is down 4% to $80.84. Investors have been selling the payments company’s shares again on Wednesday following an announcement by PayPal yesterday. That announcement revealed the upcoming launch of Pay in 4 in the United States. As its names indicates, Pay in 4 is a buy now pay later offering which allows consumers to pay for items in four interest-free instalments.
The IOOF Holdings Limited (ASX: IFL) share price has crashed 21% lower to $3.66. This follows the completion of the institutional component of its $1,040 million capital raising. IOOF raised a total of $734 million from institutional investors at a 24.4% discount of $3.50. It launched the capital raising to partly fund the acquisition of the National Australia Bank Ltd (ASX: NAB) wealth business, MLC Wealth for $1,440 million.
The Redbubble Ltd (ASX: RBL) share price is down 3.5% to $4.04. This appears to be down to profit taking from investors after some stellar gains in recent weeks. In fact, on Tuesday the Redbubble share price jumped to a record high despite the market selloff. One broker that believes its shares can still go higher is Morgans. It recently put a $4.33 price target on the company’s shares.
The Zip Co Ltd (ASX: Z1P) share price has crashed 14% lower to $6.89. Investors have been selling the buy now pay later provider’s shares amid concerns that the PayPal launch could undermine its US ambitions. Zip isn’t in as strong a position as Afterpay to fend off PayPal in the lucrative market. In addition to this, this morning Citi downgraded its shares to a sell rating with a $6.70 price target.
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More reading
- Why the IOOF share price is crashing 21% lower today
- PayPal scares investors in BNPL shares, time to sell?
- ASX 200 falls 1.8%, Afterpay drops 8%
- Why it makes sense to invest in ASX tech shares
- Zip and Brainchip were among the most traded shares on the ASX last week
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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