AFRM - Square's Afterpay deal spells 'clear negative' for PayPal Truist says

After making a big jump into the "Buy Now, Pay Later" space with its agreement to acquire Afterpay (OTCPK:AFTPF) (OTCPK:AFTPY) for $29B in stock, expect Square (NYSE:SQ) to trade "modestly lower" on Monday morning, says Truist analyst Andrew Jeffrey in a note to clients. "At first blush, we contend acquiring Afterpay is a 'proof of concept' moment for BNPL, at once validating the industry and creating a formidable new competitor for Affirm (AFRM, Buy), PayPal (PYPL, Hold) and Klarna (private)," he writes. "This is a clear negative for PayPal, in our opinion, and it reinforces our view that the co's new-initiative rev growth targets are too aggressive," Jeffrey adds. For Square, the acquisition has the potential to accelerate Seller and Cash App organic revenue growth, he said. It also furthers the company's development as a neobank and gives it a boost in its goal of overtaking legacy banks, the Truist analyst

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Square's Afterpay deal spells 'clear negative' for PayPal, Truist says