Recently I've been looking at how investments in the IPOs of a number of ASX shares have fared.
Today, I thought I would turn my attention to one of the most popular shares on the market at present – Zip Co Ltd (ASX: Z1P).
Zip Co is a fast-growing payments company which competes with Afterpay Ltd (ASX: APT) in the buy now pay later market.
The Zip Co IPO.
It has been almost five years since Zip Co listed on the Australian share market.
Its shares hit the ASX boards in September 2015 after raising $5 million through the issue of 20 million shares at 20 cents per share.
This means that if you had invested $10,000 into its IPO, you have would have received 50,000 shares.
Since then the company has gone from strength to strength thanks to the increasing popularity of buy now pay later with both consumers and retailers globally.
Consumers, particularly those in the millennial and Gen Z demographic, are turning to platforms like Afterpay and Zip Co instead of credit cards. This has led to Zip Co delivering stellar underlying sales growth over the last few years.
This has continued during the pandemic. After smashing expectations in the third quarter, Zip Co's explosive growth continued in April when it delivered monthly transaction volume of $181.6 million. This was an 86% increase on the prior corresponding period.
The good news is that this is still only scratching at the surface of its overall market opportunity. Especially now it is expanding into the $5 trillion U.S. retail market via the acquisition of QuadPay.
It is largely because of this strong form and acquisition that the Zip Co share price hit a record high of $6.97 this morning.
When its shares hit that level, the 50,000 shares you would have received by investing in its IPO would have been worth a massive $348,500. That certainly is an impressive return in less than five years, right?
