Down 6%, what is dragging the Block share price lower on Wednesday?

The Block Inc (ASX: SQ2) share price is plummeting today after the company’s US listing tumbled overnight.

The Buy Now, Pay Later (BNPL) share has dropped 6.65% and is currently trading at $94.01. For perspective, the S&P/ASX 200 Index (ASX: XJO) is descending 1.33% today.

Let’s take a look at what is going on with the Block share price.

What’s going on with Block?

Block is not the only BNPL share tumbling today. Zip Co Ltd (ASX: ZIP) shares are sliding 5.26%, while the Sezzle Inc (ASX: SZL) share price is descending 5.56%.

Block shares are falling after the company’s New York Stock Exchange listing fell in the United States on Tuesday. Block Inc (NYSE: SQ) shares dropped 5.5% on the New York Stock Exchange.

Investors in the US sold off shares following concerning consumer confidence data and recession fears, Reuters reported. Chase Investment Counsel president Peter Tuz was quoted as saying:

Markets were fine today until the consumer confidence number came out. It was weak and markets immediately began selling off.

BNPL share Affirm Holdings Inc (NASDAQ: AFRM) plummeted 9.52%, while the NASDAQ-100 Technology Sector Index (NASDAQ: NDXT) descended 3.46%.

ASX technology shares often follow the lead of their US counterparts. The S&P/ASX All Technology Index (ASX: XTX) is dropping 3.54% today.

Meanwhile, a news report from the ABC published last night shows Australia has doubled its spending using BNPL companies to $11.9 billion in the previous financial year.

However, the publication reported that new Financial Services Minister Stephen Jones has plans to regulate the industry within a year following talks with the industry. He told ABC 7.30:

I don’t want to have an argument about whether this is credit or not, it clearly is. And I don’t want to have an argument about whether there should be a minimum standard of consumer protection … background credit-worthiness checks.

Whatever you do in the financial services space, there’s big voices with deep pockets.

Block completed a takeover of Afterpay early this year and listed on the ASX as SQ2 on 1 February.

Block share price snapshot

The Block share price has sunk nearly 47% in the year to date, while it has descended nearly 20% in the past month alone.

For perspective, the benchmark ASX 200 Index has fallen more than 10% in 2022.

Block has a market capitalisation of about $3.8 billion based on the current share price.

The post Down 6%, what is dragging the Block share price lower on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Why are ASX tech shares struggling today?
• Why this economist believes ASX 200 BNPL shares are key to keeping the market competitive
• Here are the top 10 ASX shares today
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Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. The Motley Fool Australia has positions in and has recommended Block, Inc. 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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