The Zip Co Ltd (ASX: Z1P) share price has certainly been on a roller coaster over the past week. As it stands on paper, Zip shares are up 13.74% over the past 5 trading days. That includes the 0.61% that Zip shares have added so far today.
However, that number hides the fact that Zip shares climbed all the way up to near $9 a share last Thursday. Today, Zip remains down more than 7% from that high. It's trading at $8.28 a share at the time of writing.
The rollercoaster metaphor can be extended to 2021 as a whole. Zip shares are currently up a very healthy 48% year to date. However, back in February, Zip shares climbed as high as $14.53.
That put them up a staggering 163% year to date at the time. At the current share price, Zip remains down 40% from those highs.
But let's turn back to the past week. What's gone so right for this buy now, pay later (BNPL) company recently?
Is Klarna BNPL-ing some shares?
Well, it's likely that a large chunk of Zip shares' recent success can be put down to the rumours making their way around the markets last week. As my Fool colleague James covered at the time, it was reported in the Australian Financial Review that the European BNPL provider Klarna has taken a 4% stake in Zip Co.
The report states the motivation behind the move was "designed to give it options should the buy now, pay later sector consolidate down to two or three main players globally".
Klarna itself is part-owned by Commonwealth Bank of Australia (ASX: CBA). This remains speculative since neither Zip nor Klarna have confirmed (nor denied) this rumour.
Even so, the reaction from investors was one of enthusiasm. Zip shares spiked close to 15% on the morning of the report and had climbed even higher by the end of trading. However, since then, the excitement has cooled somewhat, as we noted above.
Are Zip shares a buy today?
One broker who thinks there might still be some upside in the current Zip share price is Citi. As my Fool colleagues covered earlier today, Citi has recently cut its 12-month price target for Zip shares by 6% to $10.25.
Even so, that price target implies a potential upside of almost 24% on the current Zip share price. Citi noted that customer attention for BNPL platforms, including Zip's, increased over the month of June. However, it has its eye on Zip's US QuadPay business which had a more subdued month.
At the current Zip share price, the company has a market capitalisation of $4.65 billion.