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If you invested $10,000 in the Afterpay IPO, this is how much you’d have now

The Motley Fool logo The Motley Fool 13/05/2020 James Mickleboro
a boy posing for a photo: Dividends © Provided by The Motley Fool Dividends

On Wednesday I looked at how a $10,000 investment in the CSL Limited (ASX: CSL) IPO in 1994 would have fared. Spoiler alert, you’d be very wealthy now.

Today I thought I would turn my attention to fellow market darling, Afterpay Ltd (ASX: APT).

The buy now pay later provider hasn’t been listed on the Australian share market anywhere near as long as CSL, but it certainly has achieved a lot during this time.

For example, here’s me fawning over Afterpay in July 2016 when it was just starting to gain traction with a handful of retailers in Australia.

Fast-forward to its recent business update and Afterpay now has a total of 48,400 merchants on its platform. This comprises 38,600 merchants in the ANZ market, 9,100 in the U.S. market, and 600 in the UK.

In addition to this, there are now a whopping 8.4 million active customers transacting through its platform globally. A sizeable 4.4 million of these are in the U.S. market.

The Afterpay IPO.

Afterpay has been listed on the Australian share market for just a touch over four years. Its shares landed on the ASX boards on May 4 2016 for $1.00 per share. This gave it a market capitalisation of $125 million.

This means that a $10,000 investment in its IPO would have yielded you 10,000 shares.

And although the company has merged with Touchcorp since then, Afterpay shareholders were given one share in the new entity for every share they already owned. So this figure remains the same.

Today the payments company’s shares are changing hands for $43.46, which implies a market capitalisation of approximately $11.6 billion.

This means that those 10,000 shares now have a market value of $434,600. I think you’ll agree that this is a stunning return on investment in just four years.

And given its strong growth potential, I wouldn’t be in a hurry to cash in these shares just yet. Especially if Tencent Holdings opens the door to the Asia market for it in the future. Combined with its other expansion opportunities in North America and Europe, the future looks very bright for this star stock.

As well as Afterpay, I think these top stocks could provide strong returns for investors over the coming years. They look dirt cheap after the market crash.

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Returns as of 7/4/2020

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post If you invested $10,000 in the Afterpay IPO, this is how much you’d have now appeared first on Motley Fool Australia.


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