The Afterpay Ltd (ASX: APT) share price was an impressive performer in 2019 and has started 2020 on a positive note.
In early afternoon trade the payments company’s shares are up a sizeable 3% to $30.13.
Why is the Afterpay share price storming higher today?
Today’s gain appears to be down to a combination of rebounding tech shares and the release of a regulatory update for its US operations.
Earlier this week Afterpay was one of a number of shares in the tech sector that came under pressure following a mini market meltdown.
Many of these shares have rebounded today after investors took advantage of their respective share price pullbacks.
What was the regulatory update?
Also supporting its shares on Thursday has been the release of a regulatory update on its US operations. This relates to its regulatory and credit licensing arrangements in the state of California.
According to the release, management notes that one of its rivals, Sezzle Inc (ASX: SZL) was recently denied a license application by the California Department of Business Oversight (DBO).
This caused concerns that Afterpay could suffer the same fate. However, this morning management eased concerns by revealing that it was successfully granted a California finance lender’s license through the DBO in November. This license remains valid today.
Management advised that it applied for the license to facilitate its potential future expansion into other service offerings in the US that align with its business model.
It added: “Afterpay regularly engages in dialogue with federal and state regulators in the US, including the DBO, to ensure that regulators understand Afterpay’s products and the Company’s commitment to consumer protection and compliance with applicable laws.”
Judging by its share price gain today, this news appears to have gone down very well with the market.
The post Why the Afterpay share price is storming higher today appeared first on Motley Fool Australia.
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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 AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. 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 Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020