Why is the Zip share price rocketing 7% today?

Afterpay share price a happy shopper with a wide mouthed smile holds multiple shopping bags up around her shoulders.Afterpay share price a happy shopper with a wide mouthed smile holds multiple shopping bags up around her shoulders.

It’s been a day of relief for ASX investors so far this Thursday. After posting some nasty falls on both Monday and yesterday, the All Ordinaries Index (ASX: XAO) is back in the green today, up a healthy 0.72% so far. But the Zip Co Ltd (ASX: ZIP) share price makes this look like child’s play.

Zip shares are on fire today. The All Ords buy now, pay later (BNPL) share is currently up a whopping 7.21% to 60 cents per share. Yep, Zip shares closed at 56 cents a share yesterday but opened at 57 cents this morning before rising to 60 cents just after lunchtime.

So what’s going on with Zip today that has resulted in such a happy jump in value?

The Zip share price just gained 7%, what’s going on?

Well, it’s not entirely clear. There hasn’t been any news or official announcements out of Zip today. Or indeed for a few weeks.

However, moves like this aren’t exactly uncommon with Zip shares – one of the more volatile companies in the All Ordinaries Index:

This company has also been on a bit of a slide of late too. Between 2 February and yesterday, the Zip share price lost a rather horrible 18.84%.

Today’s gains reduce that loss to 13.8%. But Zip still remains a good 29% or so from the 84 cents the company got up to last month. And we won’t even mention Zip’s current 52-week high of $2.80 per share. Nor Zip’s 2021 all-time record high of $14.53.

So it’s possible that investors just decided that Zip shares had gotten too low yesterday, and have given the company’s share price a shot in the arm on this positive day for the All Ords.

Another thing to keep in mind is that Zip is now one of the ASX’s most short-sold shares. This can mean that a good session for the company can amplify the share price gains, as some short sellers are forced to cover their positions.

At the current Zip Co share price, this ASX All Ords BNPL share has a market capitalisation of $424.77 million.

The post Why is the Zip share price rocketing 7% today? appeared first on The Motley Fool Australia.

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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 Zip Co. 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 Scott Phillips.

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