- Afterpay’s share price briefly surpassed $45 on Thursday, cementing a new all-time high for the buy now, pay later company.
- The tear upwards was sparked by news that Afterpay has amassed more than 5 million active users in the US, its key growth market.
- It flies in the face of economic fears over rising unemployment and diminished consumer appetite in Australia and the US alike.
- Visit Business Insider Australia’s homepage for more stories.
If you had bought Afterpay in late March, you’d be absolutely laughing heading into June.
With the chance to have grabbed it at under $8 a share, you could have more than quintupled your money, with the buy now pay later company continuing its astounding tear on Thursday.
Afterpay’s share price briefly eclipsed the $45 mark on Thursday – an all-time high – after it revealed business is booming in its key growth market, the United States.
“At a time in which eCommerce has become the primary way people are shopping, there is a growing interest and demand among consumers to pay for things they want and need over time using their own money – instead of turning to expensive loans with interest, fees or revolving debt,” co-founder and US CEO Nick Molnar said in a statement.
Having already grown to be by far and away the dominant local player in Australia, it has signed up more than 5 million American users ahead of schedule, with the news buoying its stock price.
“[Afterpay] has reached our financial year US active customer number forecast up to six weeks early,” Royal Bank of Canada analyst Tim Piper said in a note issued to Business Insider Australia, noting it had added 600,000 customers in the last six weeks alone.
“On a user basis, one million users – customers who have signed up but not necessarily transacted – were added over the last 10 weeks – 1 March to 15 May – through the COVID-19 crisis. The customer addition in the last 10 weeks represents a 30-40% increase in the weekly run-rate from January to February,” Piper said.
Given the size of the US consumer market, it’s a huge coup for the business as it aims to continue expansion overseas against rivals, especially Commonwealth Bank-backed European giant Klarna.
According to Afterpay, it has more than 15,000 brands and retailers on board, with some $2.4 billion in assisted sales.
The quick growth flies in the face of expectations that COVID-19, the ensuing government shutdown and the consequent global downturn would dampen spending appetite and see unemployment soar. Even those at the head of some buy now, pay later companies are expecting some of the field to be knocked out for good.
While both those outcomes appear to be playing out in Australia, and with unemployment surging in the US, it was enough to knock all buy now pay later companies back to earth in March.
Now, despite the economic outlook remaining gloomy, Afterpay appears to be taking off yet again.
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