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  • Buy now, pay later darling Afterpay (APT) has definitely felt the impact of the COVID-19 pandemic
  • The company has lost over two-thirds of its market value since Monday, March 9, before which it was trading at $32.94
  • CEO Anthony Eisen has released a letter in hopes to calm anxious investors
  • Afterpay says its business model, balance sheet and customer base creates a level of protection in times of economic uncertainty
  • The company says it has over $1 billion of warehouse facilities in place with major financial institutions and over $400 million cash on its balance sheet
  • Afterpay is down 22.41 per cent on the market this afternoon with shares worth just under $10 each

Buy now, pay later darling Afterpay (APT) has definitely felt the impact of the COVID-19 pandemic

The company has lost two-thirds of its value since Monday, March 9, before which it was trading at $32.94. On 19 February, shares reached an all-time high of $40.50. Today, they fell to below $10 each.

CEO and Managing Director Anthony Eisen has released a letter to shareholders in hopes to calm anxious investors.

As retail conditions continue to worsen there are fears that lenders like Afterpay, Zip and Sezzle will be some of the hardest hit. Anthony said the recent share price decline is solely due to the tough market, as far as the company is aware.

“We are unaware of any information, outside of the current uncertainty in the market generally, that would have precipitated recent share price performance,” Anthony said.

“I would like to acknowledge the impact that this volatility may be having on you, our securityholders, and appreciate your support through this period of market instability,” he added.

Afterpay insists it has a business model, balance sheet and customer base that creates a level of protection in times of the economic uncertainty.

In fact, despite the tumbling market, the company said it has not yet seen a material impact on the business activity and timing of instalment repayments or transaction losses to date due to the pandemic.

Anthony said the company has a “dynamic system and a risk mitigation capability”. It is currently implementing measures proactively and Afterpay is well prepared to add further measures if required.

“Due to the dynamic nature of Afterpay’s system and the short duration of our receivables book (less than 30 days) we are able to manage losses in real-time by identifying leading indicators early and modifying risk parameters in the system immediately,” he explained.

The buy now, pay later company says it has over $1 billion of warehouse facilities in place with major financial institutions, cash on its balance sheet of over $400 million and a liquidity position of over $672 million.

The company says it will continue to hold its “Afterpay Day” sale on March 19 and 20.

“We believe it is important that we continue to support our merchants who are rapidly looking to increase their online exposure in the current environment and will redirect a portion of our existing budgeted marketing spend for this purpose,” Anthony said.

Majority of Afterpay’s underlying sales are generated from online transactions.

Afterpay is down 22.41 per cent as the market closes with shares trading for $9.90 each.

APT by the numbers
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