CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

Afterpay closes oversubscribed share purchase plan, stock hits $34.8

Afterpay has today revealed the details behind its oversubscribed share purchase plan (SPP) – which officially closed last Friday, January 17.

Afterpay share price runs higher

Momentum continues to build for Afterpay (ASX: APT) – with the company’s share price today rising as much as ~2% during the morning session.

The blue-chip index also exhibited equally bullish price action today – with the ASX 200 rising as much as 1.08% – hitting the 7,142 point mark – towards the close of the session.

Share purchase plan details

All of this comes as Afterpay today announced that the company had officially closed its now scaled-back share purchase plan (SPP) last Friday, January 17.

This SPP was first revealed in June 2019 and subsequently offered to eligible shareholders in December 2019.

Looking at the specifics of this plan, it was noted that:

'Afterpay offered eligible shareholders in Australia and New Zealand the opportunity to subscribe for up to $15,000 worth of new, fully paid, ordinary shares in Afterpay, without incurring brokerage or other transaction costs.'

Under the terms of the share purchase plan, the SPP share price was determined to be $23.00 per share.

Yet as we alluded to above, due to significant investor demand, the share purchase plan had to be substantially scaled back.

‘As the value of applications, approximately $240 million, significantly exceeded the cap of $30 million for the SPP, the Afterpay Board has decided to exercise its discretion under the SPP terms to scale back application to a total of approximately $33 million.’

This scale back will be done on a pro rata basis.

To scale or not to scale

Though Afterpay’s Board considered upsizing the SPP due to demand, it was ultimately pointed out that:

'In order to preserve the original record date of 7 June 2019 and the capped issue price of $23.00 per share for the SPP, the terms of the SPP (including the maximum size of the offer) had to remain materially unchanged.'

Not scaling up the SPP – posited Afterpay’s Board – is the in the best interest of all shareholders.

As a result of the now finalised SPP, roughly 1.4 million Afterpay shares will be issued. This will add to the already 260.66 million APT shares currently on issue.

These shares are set to be allotted on Wednesday January 29.

Today’s news caps-off a strong period of growth for the fast-growing BNPL company, with Afterpay’s share price already up ~18% since December 31. Over the last year the APT share price has more than doubled.

Even with that share price run-up, Afterpay (ASX: APT) remains overwhelmingly liked by analysts: with an overweight rating on average, according to the Wall Street Journal. Nine out of the 12 analysts covering APT rate it a ‘Buy’, also according to the Wall Street Journal.


The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.