The BNPL share is ignoring the broader market, surging higher in today’s session.
The post Up 6%, the Zip (ASX:Z1P) share price is surging. Here’s why appeared first on The Motley Fool Australia. –
The Zip Co Ltd (ASX: Z1P) share price appears to be defying expectations today, currently rallying by 5.97% to $7.45.
This follows a sharp selloff on Wall Street overnight. The tech-heavy Nasdaq Composite (NASDAQ: .IXIC) fell 1.06% and US-listed buy now, pay later (BNPL) share Affirm Holdings Inc was down by 2.85%.
Why the Zip share price is bouncing
Big players eyeing Zip shares
On Monday, a change in substantial holding announcement revealed that Bank of America Corp had increased its stake in Zip from 6.15% to 7.45%.
Bank of America has had a longstanding relationship with Zip, acting as its financial advisor and placement agent during the company’s QuadPay acquisition.
The major US bank also played a part in assisting Zip with its $400 million convertible bond raising.
Bank of America’s initial 6.15% stake was announced back in April this year.
It was also just two weeks ago the Australian Financial Review speculated that Swedish BNPL provider Klarna had accumulated a 4% stake in Zip as well.
The Klarna news witnessed a 21.98% surge in the Zip share price between 7 and 8 June.
BNPL shares bounce back
Most ASX-listed BNPL shares tumbled more than 10% last week when news broke about Apple Inc potentially launching its own BNPL service and PayPal Holdings Inc‘s plans not to charge any late fees for its BNPL services.
After a grim performance last week, BNPL shares are bouncing back today. In addition to the surging Zip share price, Afterpay Ltd (ASX: APT) shares are also up by 2.57% at the time of writing.
The Sezzle Inc (ASX: SZL) share price has bounced off session lows, but is still down 0.73% to $8.17.
Quarterly update on the horizon
In the past, Zip typically delivers its fourth-quarter results in the latter half of July.
The last time we heard a meaningful update from Zip was its third-quarter results on 13 April which was followed by a $400 million notes offering to fund the company for growth. The Zip share price rocketed almost 17% higher on the day the company’s record results were released.
Should you invest $1,000 in Zip right now?
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Affirm Holdings, Inc., Apple, PayPal Holdings, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Apple and PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.