After the early excitement, in mid-morning Friday trading the Afterpay Touch (ASX:APT) share price has come back a little, now up ‘only’ $1.46 or 7.8 per cent to $20.01.
Afterpay shares opened as much as 21 per cent higher.
Forgotten in all the excitement of Afterpay the share price is the bear case for Afterpay the company.
The company has a short trading history, and investors have no idea how bad debts will look over a credit cycle. You can bet your bottom dollar that competitors will be circling, attracted by the $4 billion Afterpay valuation for what is still quite a small company. Afterpay’s revenue for FY18 was just $142 million.