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UBS analysts question rationale of US listing for Afterpay
Richard Henderson
Analysts from UBS have questioned the benefits of aUS listing for buy now, pay later giant Afterpay, which on Tuesday indicated it was considering floating in the world’s largest equity market.
Analysts, led by Tom Beadle, cautioned that the company, known by its ticker APT, had adequate access to capital through its Australian listing. They also highlighted the fact that US sales volume would have to more than double the levels in Australia and New Zealand to generate similar contribution to earnings.
“We are somewhat surprised by this particularly given APT intends to maintain its head office in Australia. While the US represents APT’s largest market by volume, profitability in the US is structurally lower due to high interchange fees,” the analysts wrote in a note on Wednesday morning.
“We see a risk that a partial or complete relisting in the US might distract management from running APT’s rapidly growing operations, particularly given the requirement for more rigorous quarterly reporting,” the analysts wrote.
Afterpay hashired Goldman Sachs to explore its optionsto list in the US,The Australian Financial Review’s Street Talk column revealed yesterday.
