Why are ASX buy now, pay later shares rocketing higher today?

Why are ASX BNPL shares on a rocket this Tuesday?

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Key points

  • ASX shares are having a very mild day this Tuesday 
  • But not so for ASX BNPL shares, which are soaring in value 
  • What's going on in the BNPL share space today? 

It's been a very bumpy day of trading so far today on the ASX boards. As it currently stands, the All Ordinaries Index (ASX: XAO) has gained just 0.13% and is hovering at just over 7,000 points. But no one seems to have told the ASX buy now, pay later (BNPL) shares.

BNPL shares are having an absolutely jubilant day. Take the Zip Co Ltd (ASX: ZIP) share price. As we looked at earlier, Zip shares are having a cracker. The ASX's biggest BNPL share has rocketed by 20.47% so far today to back over $1 a share.

That comes after the company rose as high as $1.07 at one point this morning (up 24%). It's the first time in two months that Zip shares are asking dollars, not cents.

But it's not just Zip shares at the party. Zip's BNPL rival that was left at the altar last month – Sezzle Inc (ASX: SZL) – is up more than 20% so far today at 31 cents a share. Again, Sezzle went as high as 34 cents this morning, a gain of more than 30%.

Or take Splitit Ltd (ASX: SPT). Splitit shares have risen a healthy 14.3% so far today to 24 cents each.

Interestingly, Block Inc (ASX: SQ2), the now-owner of the old BNPL pioneer Afterpay, is not crashing the BNPL party. In stark contrast to these other BNPL shares, Block shares have been smashed today, currently down close to 4%. But Block is not a pureplay BNPL share and is headquartered over in the US. So that might explain this disparity.

So what's lighting a rocket under the BNPL space today?

Why are ASX BNPL shares like Zip having such a cracker today?

Well, unfortunately, it's not quite clear. Zip, nor any of the other ASX BNPL shares, has released any news or announcements today. Or indeed this week so far. So we can only speculate.

Today is not the first day we have seen renewed interest in BNPL shares. Zip has been on the up for a few weeks now. In fact, the company has put on an impressive 130% or so since only 30 June.

We have seen a number of well-received developments out of Zip in particular over the past few weeks. These could be spurring investors into BNPL shares today.

The first was the news that the planned merger between Zip and Sezzle had been scrapped. At the time, this news sent Zip shares higher, and Sezzle shares lower. But all appears forgiven on the Sezzle side of the ledger today.

Perhaps more significantly, Zip gave investors a well-received quarterly update just last week. This showed that the company's revenues over the three months to 30 June grew by a healthy 27% to $160.1 million. The company also reported that transactions and customers were also up significantly over the period.

Thus, it's very possible that the goodwill from this announcement is still flowing into the entire ASX BNPL space today.

Whatever the reason, it's certainly a pleasing day for almost all ASX buy now, pay later share investors this Tuesday.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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