Afterpay Day is back - could it spike the APT share price again?

It’s happening again!

For the frugal and the impulsive, there are bargains to be found at Afterpay Day event, which starts today.

Afterpay Day is a bi-annual event where shoppers can get up to 70 per cent discounts on items sold by Afterpay’s merchants in-store and online. The event happens in March and August every year, and usually lasts for several days each.

This year’s event kicks off today at 8am, and is good until end of day Sunday, March 21.

The event has become one of the biggest shopping events in Australia, probably just behind Black Friday and Boxing Day in terms of public interest and sales.

In 2020, Black Friday, which was held on November 25-30 (Cyber Monday is November 30), ended up being the biggest ever shopping event in the country’s history.

According to figures from Westpac, a record 68 million transactions were made during Black Friday in 2020, up by 5.7 per cent from the previous year.

Boxing Day sales in 2019 in comparison, invited 8 million transactions.

Although Afterpay doesn’t report its sales figures from this event, it’s likely that transactions will also be in the millions.

Correlation between Afterpay Day and the share price

Is there some correlation going on between the Afterpay Day event and its share price?

A quick look reveals that during the March 2020 Afterpay Day event, which was held on March 19-20, the Afterpay share price went through the roof one week after the event.

On March 18, 2020, which was a day before the event, the Afterpay share price was trading at $12.76 (yes, $12 not $120), and by March 26, the share price blew out to $19.41 – an increase of more than 50 per cent.

A similar thing happened during its August event, which was held on August 20-21 2020.

The share price on the August 19 was at $75, and surged to $92.48 by August 25.

On both occasions, there were no major news released to the ASX by the company during the week in question. There was, however, certainly an increase in media coverage and general brand awareness.

Whether you can read anything into that is another proposition altogether. After all, Afterpay has been undergoing a massive rise in share price in the past 12 months, rising by almost 500 per cent.

It reported a 106 per cent increase in sales to $10 billion for the first half of FY21 ending in December, for a net loss of $76.5 million.

The company has not delivered a profit so far, and its share price has been under pressure since the beginning of the year along with other tech stocks, falling by up to 50 per cent.