IJ My AFR daily summary says that UBS today halved its share...

IJ
My AFR daily summary says that UBS today halved its share price target for Afterpay by 50% down to $17.50 perhaps explaining why Afterpay dropped 7.2% today. See article below.

As we all know when APT goes up FXL goes down and when AFT goes down FXL goes down.

Cheers.............Daicosisgod

ASX closes 1.3pc higher; Afterpay takes 7.2pc hammering
UBS rates Afterpay 'sell', halves its target price

Lucas Baird

The largest risk for UBS appears to be regulation, where they see two overarching problems. Dominic Lorrimer
UBS analysts have rated buy-now-pay-later giant Afterpay Touch as a "sell" and more than halved their target price to $17.25 as three significant risks circle the company.
The risks, which the analysts say the market has not fully factored in, include increasing competition in the BNPL sector and uncertainty around whether Afterpay can match expectations over the next five years.
But the largest risk for UBS appears to be regulation, where they see two overarching problems – can Afterpay continue to prohibit its merchants from surcharging and will the company be considered a credit provider in the future?
"Afterpay requires merchants to not pass the cost of providing Afterpay to their customers. For a $150 transaction, Afterpay's fees represent a [about 19 per cent to 40 per cent plus the internal rate of return] to Afterpay. If customers are presented with the true cost of using BNPL, we see risks to our [gross merchandise value] forecasts," UBS said.
"For now, Afterpay falls outside the definition of being a Credit provider and is therefore not regulated by the National Credit Code. UBS Evidence Lab asked BNPL customers if they think the service is a credit service: 64 [per cent] agreed."
"UBS Evidence Lab also found evidence that BNPL is used as credit in some circumstances. The perception of being credit raises the risk of regulation."