It's been a big month for the Zip (ASX:Z1P) share price

It's been a rollercoast month for this BNPL player

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The ZIP Co Ltd (ASX: Z1P) share price is up almost 29% in the past month. But it hasn't all been smooth sailing. 

Shares in the buy-now-pay-later (BNPL) company started June at around $6.93, before rallying to a high of $9.11 late in the month. Zip shares then took a sharp dive before finding a base at $7.20.

Since then, the Zip share price has bounced more than 20%, including a 13% rally yesterday.

Why did the Zip share price surge yesterday?

The Zip share price surged more than 13% yesterday, hitting an intra-day high of $9.00 before closing at $8.78.

There was no news out of the company that could explain the bullish price action. Instead, investors may have been flocking on the back of speculation that a rival BNPL provider acquired a strategic stake in the company.

According to an article in the Australian Financial Review, Swedish backed BNPL provider Klarna reportedly took a 4% stake in Zip to consolidate its market share. Klarna is part-owned by the Commonwealth Bank of Australia (ASX: CBA).

Neither Zip nor Klarna responded to the speculation.

Strength in the ASX tech sector

Despite not releasing any price sensitive news within the past 2 months, Zip shares have experienced some volatile movements.

Given the lack of news, overall strength in the tech sector and the company's growth in the second half of FY21 could explain the share price movements.

In the third quarter of FY21, Zip saw record group quarterly revenue of $114.4 million, which was an increase of 80% year on year. Quarterly transaction volume also increased 114% to $1.6 billion.

Zip highlighted its US division, with transaction volume in the region growing 234% to $762 million.

The Zip share price was also on the receiving end of negative broker coverage in late June. According to a note from analysts at Citi, Afterpay Ltd's (ASX: APT) expansion in the US market could put pressure on Zip's US-based QuadPay business.

Despite the volatility, the Zip share price is still trading around 60% higher since the start of the year.

Motley Fool contributor Nikhil Gangaram 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 and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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