Stimulus end could challenge buy now, pay later's rampant rally | domp
Fund managers and analysts have warned the heady run of buy now, pay later stocks such as Afterpay, Zip and Splitit could hit a wall in September as the end of government stimulus packages dents consumer spending., in some cases doubling or tripling in value, fuelled by a slew of bullish trading updates and a changing consumer environment.At the forefront of this has been market darling Afterpay, which has rocketed over 700 per cent since its low of $8.90 in March, most recently trading at $72.
"So if Afterpay can navigate the next three to six months without any meaningful spikes in bad debts it will lead to a further re-rate of the share price".Sydney Morning Herald The potential removal of stimulus is less of a concern for Bronte Capital's John Hempton, who is pessimistic about Afterpay and the broader sector, likening it to the late 90s dot com bubble.to question why investors continued to back operators like Afterpay.
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