Why the Zip (ASX:Z1P) share price is storming 10% higher today

Here’s why the Zip Co Ltd (ASX:Z1P) share price is one of the best performers on the ASX 200 on Monday and rocketing notably higher…

| More on:
beat the share market

One of the best performers on the S&P/ASX 200 Index (ASX: XJO) on Monday has been the Zip Co Ltd (ASX: Z1P) share price.

In afternoon trade the buy now pay later provider’s shares are up a massive 10% to $9.60.

This means the Zip share price is now up a remarkable 72% since the start of 2021. As a comparison, the ASX 200 is up around 3% year to date.

Why is the Zip share price surging higher?

Investors have been fighting to buy Zip’s shares this year thanks largely to its impressive second quarter update in late January.

That update revealed that Zip delivered a 103% increase in transaction volume to a record $1.6 billion for the three months ended 31 December.

A key driver of this strong performance was Zip’s US-based QuadPay business.

Despite increasing competition from PayPal and Shopify, QuadPay reported a 217% increase in transaction volume to $673.1 million. This was driven by a 180% lift in customer numbers to 3.2 million and a 655% jump in merchants to 8,400 in the world’s largest retail market.

What about today’s gains?

Today’s gain in the Zip share price appears to be attributable to the aforementioned QuadPay business.

Thanks to its huge success, Zip is rumoured to be considering a secondary listing in the United States.

According to the AFR, management will spend the next few days in front of US investors, highlighting the meteoric growth of QuadPay.

By issuing American Depository Receipts that would mirror its ASX-listed shares, Zip would be able to trade in the US, giving it greater access to US capital markets.

The AFR notes that this would allow institutional investors who cannot invest in the ASX because of investment mandates to buy shares. However, according to the report, discussions regarding the US listing are believed to be at an early stage.

Though, there does appear to be substance to the rumours. A number of brokers are understood to be pitching secondary listings of a range of Australian technology shares that they think could attract US investor interest.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

Technology Shares

Droneshield share price leaps 10% amid strong Ukrainian demand

The company's anti-drone systems are employed by militaries, law enforcement and private enterprises across the world.

Read more »

A kid and his grandad high five after a fun game of basketball.
Share Gainers

3 ASX All Ordinaries shares hitting multi-year highs on Monday

These names are outpacing major benchmarks today.

Read more »

A graphic showing a businessman running up a white upwards rising arrow symbolising the soaring Magellan share price today
Share Gainers

Why Brambles, Core Lithium, Infomedia, and Qube shares are charging higher

These ASX shares have started the week strongly...

Read more »

A man sits on a couch with his arms out feeling exasperated while looking at the Costa share price going down on his laptop today
Share Gainers

Why is the ASX 200 giving back the morning’s gains on Monday?

Aussie shares are showing mixed results on Monday.

Read more »

Person pointing at an increasing blue graph which represents a rising share price.
Share Gainers

Why is the Nitro Software share price rallying 5%?

Tech shares are showing signs of life again on Monday.

Read more »

A graphic showing a businessman running up a white upwards rising arrow symbolising the soaring Magellan share price today
Share Gainers

Here’s why the Chrysos share price is rebounding 16%

Investors are staging a comeback for the company.

Read more »

A drawing of a rocket follows a chart up, indicating share price lift
Share Gainers

Here’s why the Australian Strategic Materials share price is surging 31% today

The ASX rare earths and critical metals miner has come under selling pressure since hitting record highs in November last…

Read more »

A woman with strawberry blonde hair has a huge smile on her face and fist pumps the air having seen good news on her phone.
Share Gainers

These were the best performers on the ASX 200 last week

These ASX 200 shares avoided the market selloff...

Read more »