The Block Inc (ASX: SQ2) share price is off to a poor start this week.
Block shares closed on Friday trading for $144.89 and are currently at $107.50, down 6.4% in morning trade.
The Block share price is now down 14.6% since the ASX buy now, pay later (BNPL) share released its quarterly report on 5 August. Investors appear underwhelmed with the company’s expectations of slowing growth in Q3.
Why is the Block share price sinking again today?
Block, which acquired Afterpay in January this year, began trading on the ASX on 20 January.
The global payments company is also listed on the New York Stock Exchange. And the Block share price on the ASX tends to follow, if not mirror, the moves of its US-listed stock. In Friday’s trade, Block shares closed 6.7% lower on the NYSE.
It’s not just Block selling off today.
While the S&P/ASX 200 Index (ASX: XJO) is down a more modest 1.27% at the time of writing, fellow ASX BNPL share Zip Co Ltd (ASX: ZIP) is down 4.33%. Meanwhile, the Sezzle Inc (ASX: SZL) share price is down 5.03%.
Part of that sell-off can be pinned on renewed selling in the tech sector, with the NASDAQ closing down 2% on Friday and the S&P/ASX All Technology Index (ASX: XTX) down 1.7% today.
But the Block share price and other BNPL stocks look to be coming under added pressure from the prospect of more interest rate hikes ahead.
As rates continue to rise, following a period of more than 10 years where they only went lower, analysts are expecting BNPL companies to struggle with increasing levels of bad debts.
2022 has been a tough one for investors in the BNPL sector. Since listing on 20 January, Block shares have dropped 39%.
Since 4 January, Zip shares are down 77%, while the Sezzle share price has tanked 75%.
The post Why is the Block share price tumbling 6% today? appeared first on The Motley Fool Australia.
Wondering where you should invest $1,000 right now?
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now
See The 5 Stocks
*Returns as of August 4 2022
(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}
setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()
More reading
- These are the 10 most shorted ASX shares
- How does Zipâs âOperation Blue Skyâ stack up against Blockâs battening down of the hatches?
- Why is the Zip share price behaving so strangely on the ASX today?
- Sezzle share price soars 22% as BNPL company eyes profit target by year-end
- Here are the top 10 ASX 200 shares today
Motley Fool contributor Bernd Struben 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. and ZIPCOLTD FPO. 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.
from The Motley Fool Australia https://ift.tt/9anF45w
Leave a Reply