Is the Zip Co share price in the buy zone?

The Zip Co Ltd (ASX: Z1P) share price has returned from its trading halt this morning and edged lower.

At the time of writing the payments company’s shares are down 1% to $1.64.

Why was Zip in a trading halt?

Zip requested a trading halt on Wednesday whilst it sought to raise $42.8 million before costs via a placement of 28 million ordinary shares.

This morning the company announced that it has successfully completed the placement thanks to support from new and existing institutional, sophisticated and professional investors. In fact, demand was so high for its shares that the placement closed early.

The issue price for the placement was $1.53 per share, which represents a 7.8% discount to the last traded price of the company’s shares.

The money raised from the placement could increase by a further $8.9 million if banking giant Westpac Banking Corp (ASX: WBC) decides to take up its top-up right. This was granted to the bank as part of its investment in Zip in 2017 and will allow it to maintain its percentage holding in the company.

Notice has been given to Westpac, but it has not yet advised whether it will take advantage of its top-up right. It has until April 1 to decide.

What now?

Larry Diamond, managing director and CEO of Zip, explained that the additional capital will be used to fund its growth strategies.

He said: “We greatly appreciate the support of our existing shareholders that participated in the Placement and welcome all the new shareholders that have joined our register as part of this equity raise. The additional equity capital will enable Zip to continue its significant growth through further investment to support our brand, enhance our product, and monetise our assets. The capital raising will also provide a stronger balance sheet to capitalise on growth opportunities, both organic and inorganic.”

Should you invest?

With Afterpay Touch Group Ltd (ASX: APT), Splitit Ltd (ASX: SPT), and FlexiGroup Limited (ASX: FXL) all offering buy now, pay later services, investors certainly have a lot of options in the space.

Whilst Afterpay Touch remains my preferred pick due to its global growth opportunities, I think Zip Co is well worth considering as well. I’ve been very impressed with its progress and believe it has a bright future ahead of it.

As well as Afterpay Touch and Zip, these exciting shares have been tipped as the ones to buy in March.

Top 3 ASX Blue Chips To Buy For 2019

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked...

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2019."

Each one pays a fully franked dividend. The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies move – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro owns Westpac shares. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended FlexiGroup Limited. 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 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!