Category: Stock Market

The Audio Pixels Holdings Ltd (ASX: AKP) share price has returned from its trading halt and is shooting higher.

In afternoon trade, the Israel-based digital speaker developer’s shares are up a massive 32% to $25.10.

Why is the Audio Pixels share price shooting higher?

The catalyst for the rise in the Audio Pixels share price on Friday has been the release of an announcement relating to its long-developed digital loudspeaker products.

According to the release, the company has signed a comprehensive agreement with Earth Mountain (Shanghai) Intelligent Technology to mass produce Audio Pixels’ transformational digital loudspeaker products.

While details on Earth Mountain (Shanghai) Intelligent Technology are very limited on the internet, the release explains that it is a full-service semiconductor company with a focus on the mass commercialisation of devices and systems rooted in Micro Electrical Mechanical Systems (MEMS).

A search also shows that Earth Mountain was founded by representatives of Israel-based ORAD Ltd, which specialises in solutions for complex technology multidisciplinary projects in security and in perimeter protection.

The agreement

The agreement sees Earth Mountain guarantee Audio Pixels with a long-term resilient supply of tens of millions of digital loudspeaker chips per year from the first quarter of 2022. Though, it is important to note that this is not a sales order but merely the promise of supply if sales are made.

Former poker play and current Audio Pixel’s Chairman, Fred Bart, commented: “This agreement with EM represents a major milestone toward the commercialization of our technologies is all the more valuable given that it comes at a time when industry at large is struggling to secure semiconductor fabrication capacity. Our collaboration with EM enables us to expedite and broaden the number of customers and applications for our ground-breaking technologies”

Earth Mountain’s CEO, Helen Du, said: “We are excited to be a part of Audio Pixels’ international ambitions to transition sound reproduction technologies into the digital era. We hope to expand our relationship in AKP beyond this fabrication and commercialization agreement to include promotion, distribution and support for the products throughout greater China.”

The post Why the Audio Pixels (ASX:AKP) share price is shooting 32% higher appeared first on The Motley Fool Australia.

More reading

• Could 2022 be the year ASX 200 tech shares get some love?
• What’s dragging the Incannex (ASX:IHL) share price 5% lower today?
• BNPL whacked! Why the Afterpay (ASX:APT) share price is down 7% to a new 52-week low today
• Rio Tinto (ASX:RIO) share price lifts despite lithium project plans suspended following protests
• Here’s why the Leigh Creek (ASX:LCK) share price is crashing 8% downstream today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.

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This year has been a brutal one for investors of tech shares in the S&P/ASX 200 Index (ASX: XJO).

Not so long ago, companies in the information technology space were the darlings of the Australian share market. The allure of potentially far superior returns (even multibaggers) within the space attracted new investors hand over fist. In turn, we witnessed the creation of the ‘WAAAX‘ shares and a new ASX index known as the S&P/ASX All Technology Index (ASX: XTX).

However, the tides shifted throughout this year as fears of higher interest rates strained valuations of ASX 200 tech shares. To put it into perspective, only two of the five WAAAX shares have posted a positive return this year.

Despite a fruitless 2021, could the tech sector be the recipient of some affection next year?

Fund managers hone in on tech shares for 2022

If the Sohn Hearts & Minds Investment Conference earlier this month was anything to go by, fund managers are locking onto the unloved sector. Nearly two-thirds of the 13 stock picks at the conference fell into the tech category. Though only one pure tech play featured in the list was a constituent of the ASX 200.

The one ASX 200 tech share making the cut was multi-cloud connectivity provider, Megaport Ltd (ASX: MP1). Unlike many other ASX-listed tech shares, the company founded by Bevan Slattery managed to outperform the benchmark index this year — rising 28.5%.

However, investing great Charlie Munger delivered a shot across the bow to investors at the conference. The other half of the iconic duo at Berkshire Hathaway warned that valuations still looked crazier than in the dotcom era. A broad market rally has Munger believing equities are expensive, especially for ‘great’ companies.

ASX 200 tech shares experts are keeping an eye on

Let’s take a quick look at a couple of ASX 200 tech shares that have made it onto the experts’ ‘good’ list coming up to Christmas.

The first company that could be looking attractive as we head into 2022 is Life360 Inc (ASX: 360). The family safety app provider is a buy for Tribeca Investment Partners’ Jun Bei Liu and Market Matters’ James Gerrish. A combination of high organic growth and reasonable valuation has this tech company ripe for the picking in the eyes of these experts.

Another ASX 200 tech share that has investors intrigued coming up to the end of the year is Tyro Payments Ltd (ASX: TYR). The payments solution company is a buy for Gerrish — looking out 12 months from now, the fund manager reckons total transaction value should increase ‘very strongly’.

The post Could 2022 be the year ASX 200 tech shares get some love? appeared first on The Motley Fool Australia.

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• This top fund manager just called these leading ASX shares a buy
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• Down 25% in six months, is the Tyro (ASX:TYR) share price now a bargain buy?
• 3 hot ASX tech shares to buy in 2022

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Life360, Inc., MEGAPORT FPO, and Tyro Payments. The Motley Fool Australia has recommended MEGAPORT FPO and Tyro Payments. 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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The Incannex Healthcare Ltd (ASX: IHL) share price is in the red today after a company update on its potential NASDAQ listing.

Shares in the medicinal cannabis company were swapping hands at 47.5 cents at the time of writing, down 5%.

Let’s delve into what might be weighing on the Incannex share price today.

What did the company announce?

Incannex is planning an initial public offering (IPO) on the United States NASDAQ exchange early next year under the ticker NASDAQ: IXHL.

As reported by my Foolish colleague Zach, the company filed the F-1 form for listing with the US Securities and Exchange Commission back in August.

However, the company advised today that shareholder approval for the issue of 180 million shares as part of the offering had now expired.

The number and price of the American Depositary Shares to be issued under the potential offering still needs to be decided.

Despite this, Incannex informed investors it was still in a position to conduct an offering in January 2022.

The company told investors it had taken several months to address comments raised by the US Securities and Exchange Commission. However, these issues have now been “adequately addressed”.

The company is seeking a dual listing, so Incannex shares will continue to be listed on the ASX during and after the potential US offering.

Management comment

Commenting on today’s update, CEO and managing director Joel Latham said:

We are grateful to our team for their work on the registration process and now look forward to marketing the offering and listing on Nasdaq in January when institutional investors are back on deck after the relatively short winter holiday period in the northern hemisphere.

It’s been a momentous year for Incannex with six research and development programs that continue to progress rapidly.

Incannex Healthcare share price snapshot

The Incannex share price has gained a whopping 206% since January this year.

However, shares in the company have dived nearly 10% in the past week and 15% in the last month.

Based on the current share price, Incannex has a market capitalisation of roughly $574 million.

The post What’s dragging the Incannex (ASX:IHL) share price 5% lower today? appeared first on The Motley Fool Australia.

More reading

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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.

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Much to the relief of ASX investors no doubt, the S&P/ASX 200 Index (ASX: XJO) is actually enjoying a day in the green so far this Friday.

At the time of writing, the ASX 200 is up a healthy 0.49% at 7,331 points. That may come as a reprieve to many investors, who have had to watch the ASX 200 go backwards for most of the week.

But somehow, no one told buy now, pay later (BNPL) shares like Afterpay Ltd (ASX: APT).

BNPL shares are getting whacked on the ASX boards today and poster child and pioneer Afterpay is taking the brunt of it. The Afterpay share price is currently down a nasty 7.37% and is going for $82.90 right now.

Earlier in today’s session, Afterpay shares hit $81.30, which is a new 52-week low for the company. Afterpay hasn’t seen that kind of pricing for its stock since early October last year.

But it’s not just Afterpay. The entire ASX BNPL sector is awash with red ink today. Look at Zip Co Ltd (ASX: Z1P). Zip shares are down 6.29% to $4.17 after also hitting a new 52-week low earlier today at $4.05.

Sezzle Inc (ASX: SZL) is down 7.12% to $3. And Openpay Group Ltd (ASX: OPY) has lost 6.11% at 85 cents a share. All 4 of these BNPL shares have hit 52-week lows today.

BNPL share Afterpay hits 52-week low

So we don’t need to look too far to see what’s going on here. As we covered this morning, these falls come amid a new probe into the BNPL sector that has just been launched by the US Consumer Financial Protection Bureau (CFPB).

This probe is examing whether the US BNPL space needs further regulation. While only Afterpay and Zip are being targeted by this investigation, the fallout seems to be extending to other ASX BNPL shares, going by the above share price movements.

Circling back to the Afterpay share price, it wouldn’t have helped that the Block Inc (NYSE: SQ) share price fell by more than 4.5% overnight as well.

Block (formerly known as Square) is the company set to acquire Afterpay in the next few months. Since Afterpay shareholders are to receive a fixed ratio of 0.375 Block shares for every Afterpay share they own, any falls in the Block share price reduces the value of this takeover for Afterpay investors.

So not a good day at all for ASX BNPL investors this Friday.

The Afterpay share price is now down more than 30% in 2021 so far.

The post BNPL whacked! Why the Afterpay (ASX:APT) share price is down 7% to a new 52-week low today appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: BNPL shares sold off, Corporate Travel returns
• Zip (ASX:Z1P) share price dives 8% amid US concerns and Sezzle merger rumbles
• ASX BNPL shares tumble today amid US probe
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX shares today

Motley Fool contributor Sebastian Bowen owns Block, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended AFTERPAY T FPO, Block, Inc., and ZIPCOLTD FPO. The Motley Fool Australia owns 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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The Rio Tinto Limited (ASX: RIO) share price is currently up 0.8%. It’s underperforming the BHP Group Ltd (ASX: BHP) share price which is up 1.4%.

Rio Tinto is best known as a global powerhouse in the iron ore industry. But it had been hoping to expand into the lithium world with a huge mine project in Serbia called Jadar.

However, the business has been facing pressure with large protests against the planned mine with concerns on the environmental impacts and protections.

There have been concerns by protestors about long-term damage to rivers and farmland where the Jadar project is located.

Rio Tinto’s lithium mine has been reportedly suspended

According to reporting by The Guardian, local authorities in western Serbia have suspended plans to allow the mining to go ahead.  

The mining had been expected to start soon. However, a town council in Loznica has reportedly voted to suspend a regional development plan that allowed the mining of lithium.

This vote came after the suspension last week of two laws in Serbia’s parliament that would help Rio Tinto start the mine.

The Guardian quoted the Serbian Prime Minister, Ana Brnabić, who said:

Whether there will be a mine depends on people [in western Serbia] and the study on environmental impact assessment. These are the two conditions that the president stated earlier.

Serbian President, Aleksandar Vučić has said that “we will have to speak in a different way to Rio Tinto and others”.

The miner’s response

It was reported by The Guardian that Rio Tinto said in a statement on Thursday that it worked in accordance with laws and the highest professional standards throughout its 10-year presence in Serbia in order to launch “the largest mining investment in this part of the world”.

A lot is riding on this project

Rio Tinto has committed US$2.4 billion to the Jadar lithium-borates project in Serbia, which it hopes will be one of the world’s largest greenfield lithium projects. It could have a growing influence on the Rio Tinto share price over time, if approved.

It boasted that it would add 1% directly and 4% indirectly to GDP, with many Serbian suppliers involved in the construction of the mine. Rio Tinto also said it would create 2,100 jobs during construction and 1,000 mining and processing jobs in production.

First saleable production was planned for 2026, with full production in 2029.

Rio Tinto has noted that this mine could be help the global energy transition and give the miner exposure to the important commodity of lithium. The Jadar project could supply enough lithium to power over one million electric vehicles per year.

The post Rio Tinto (ASX:RIO) share price lifts despite lithium project plans suspended following protests appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.

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The Leigh Creek Energy Ltd (ASX: LCK) share price is one of the worst performers on the ASX this morning. This comes after the energy producer announced an institutional share placement to a United States-based investor.

At the time of writing, Leigh Creek Energy shares are down 8.57% to 16 cents.

What are the details of the placement?

Investors are driving down the Leigh Creek Energy share price today as the company is set to dilute shareholder value.

According to its release, Leigh Creek Energy advised it has secured up to $20 million (before costs) through a placement. The leading investor in energy transitions, Energy Exploration Capital Partners, LLC is the sole participant in the equity raise.

There will be 3 different phases to the placement. The initial issuance of 14.8 million shares will see net proceeds of $7.5 million handed to Leigh Creek Energy. It will be priced at the average of the 5 daily volume-weighted average prices (WVAP) less a 10% discount.

Following on, the second and third phases may take place provided that the market price for the company’s shares don’t fall below 8.5 cents. Leigh Creek Energy could potentially receive further net proceeds of $3.9 million and $3.6 million respectively. The latter is subject to shareholder approval, which is expected to be sought within the next 3 months.

Additionally, another $5 million is available with consent from Energy Exploration Capital Partners.

Leigh Creek Energy will use the funds from the placement for a number of key aspects of its flagship project. The Leigh Creek Urea Project (LCUP) will see stage 1 onsite works followed by ongoing stage 2 study and development costs.

Leigh Creek Energy managing director, Phil Staveley, commented:

This is the next, vital, stage in our overall, larger project funding strategy, which will be executed over the course of the next year. EECP originally invested in LCK 12 months ago, based on our prospects at that time. LCK has achieved a lot since then.

It is a testament to our performance that EECP are not only still shareholders but that today they are also prepared to invest a larger additional amount.

Leigh Creek Energy share price summary

Since this time last year, the Leigh Creek Energy share price has largely moved in circles and registered a loss of 5.88%.

Leigh Creek Energy commands a market capitalisation of roughly $133.4 million and has approximately 847.1 million shares on issue.

The post Here’s why the Leigh Creek (ASX:LCK) share price is crashing 8% downstream today appeared first on The Motley Fool Australia.

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• MoneyMe (ASX:MME) share price spikes on $132 million acquisition news
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.

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Shares in digital consumer credit business MoneyMe Ltd (ASX: MME) jumped from the open today to trade as high as $1.90 in the green. The share price has since lowered to currently trade at $1.79, up 1.42%.

The upward spike comes following a company announcement that MoneyMe is set to acquire SocietyOne “to boost revenue, customer and profit growth”.

It purchased the company on an implied acquisition price of $132 million, based on MoneyMe’s 16 December 2021 closing share price, and assuming that the consideration is 100% MoneyMe shares.

The company says the transaction delivers a “powerful combination of two of the leading innovators in the consumer lending market and will harness SocietyOne’s strong brand recognition as a pioneer in disruptive personal lending”.

Both businesses have synergies that align with MoneyMe’s s proprietary technology platform, Horizon, the release notes.

The collaboration is set to bring distribution capabilities spanning across direct digital, direct traditional, broker, agent and dealer, as well as delivering improved data and funding opportunities, MoneyMey says.

What is SocietyOne?

MoneyMe notes that SocietyOne is a pioneer and leading brand in disruptive consumer lending. For instance, it has a “strong net promotor scores (NPS) of +69 and a Product Review score of 4.7 out of 5.0”, boasts a $392 million pro forma loan book, as well as pro forma unaudited revenue of $50 million in FY21.

The company has 25,000 active loan customers and 147,000 customers engaged in SocietyOne’s “credit score wellness product”.

MoneyMey also says that SocietyOne is backed by a “high quality shareholder base” that includes Seven West Media, Australian Capital Equity, News Corporation, Reinventure, Consolidated Press Holdings and G&C
Mutual Bank.

Why the collab?

MoneyMe had several justifications for its “strategic rationale” for the transaction. These include factors such as a 72% increase in MoneyMe pro forma loan book size to $934 million and pre-tax cost synergies of $17 million per annum.

It also views revenue synergies from SocietyOne’s customer base, by reducing SocietyOne customer experience time to fund down from 1-2 days to around 1-2 hours with its Horizon platform.

The deal also unlocks new distribution opportunities, by expanding broker channels, accelerating financial wellness channels, whilst leveraging SocietyOne’s credit score product with an approximate 147,000 customer base.

Aside from this, MoneyMe intends to leverage the “power” of combined data. For instance, there is over $2 billion of combined customer origination data in the collaboration, “enabling increased revenue and improved credit risk management through advancements in credit underwriting, artificial intelligence (AIDEN), marketing and customer behaviour analysis”.

With respect to financials, the company sees an 86% increase in its FY21 combined pro forma revenue and $146 million in annualised revenue. This represents a 63% increase for MoneyMe on a standalone basis.

Management commentary

Speaking on the announcement, Clayton Howes, MoneyMe’s Managing Director and CEO said:

The SocietyOne acquisition combines two of the most widely recognised consumer credit disruptors to deliver immediate scale advantages and incremental revenue opportunities. The strategic value is immense for both businesses, and we are incredibly excited. The opportunity to accelerate growth and cost efficiencies are quickly realised by combining the strengths of both brands and migrating SocietyOne operations onto MoneyMe’s high-tech Horizon Technology Platform. The SocietyOne brand will continue to thrive and will benefit from access to MoneyMe’s diversified product set and ability to deliver leading customer experiences.

Howes added:

There are many new innovations we will expand on, including the SocietyOne credit score product which will be brought to the MoneyMe customer base and the Banking-as-a-Service partnership with Westpac that we will continue to explore.

The post MoneyMe (ASX:MME) share price spikes on $132 million acquisition news appeared first on The Motley Fool Australia.

More reading

• Moneyme (ASX:MME) share price slides 9% despite record trading update

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.

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Macquarie Group Ltd (ASX: MQG) is down 0.3% at time of writing, having given back some small early morning gains.

The S&P/ASX 200 Index (ASX: XJO), meanwhile, is in the green, up 0.5%.

Macquarie shares are in the spotlight today with fresh news breaking revealing the company is a frontrunner to takeover to become a joint venture partner with VicRoads’.

What’s happening with VicRoads’ joint venture?

Victoria’s government revealed its intentions to take on a joint venture partner for VicRoads back in March.

VicRoads is a segment of Victoria’s Department of Transport. The successful partner will take over VicRoads’ registration, licensing, and custom plates services.

As The Motley Fool reported on 22 September, the Victorian government said:

The privatisation of the registry segment would provide a more user-friendly and cost-effective service. It will also allow the government to continue to control prices, road access, and safety without affecting jobs at VicRoads.

Companies were able to report their expressions of interest in September. And that’s when rumours first emerged that Macquarie was looking to become the joint venture partner.

While VicRoads isn’t meant to decide on the successful bidder until Q1 2022, news broke today that Macquarie remains a front runner in the process.

According to The Australian, “The contest for the $2bn-plus Victoria motor registry unit VicRoads … is shaping up as a shootout between Macquarie Group and Morrison & Co.”

Morrison & Co is a private alternative asset manager with a strong focus on infrastructure and property investment.

While final bids aren’t due until the latter part of the first quarter of 2022, The Australian reported that it understands  “Macquarie Infrastructure and Real Assets with Aware Super, advised by Gresham and Macquarie Capital” made their initial bid on Tuesday.

As was the case in September, Morrison & Co remains its chief competition. “Brookfield is believed to be teaming up with Morrison & Co as a contender, taking advice from Barrenjoey Capital Partners.”

How have Macquarie shares been performing?

Macquarie shares have well-outpaced the benchmark over the past 12 months, gaining 46% compared to the 8% gain posted by the ASX 200.

Over the past month the Macquarie share price is up 2%.

The post Frontrunners emerge in Macquarie (ASX:MQG) VicRoads play appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. 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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At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a positive note. The benchmark index is currently up 0.55% to 7,335.6 points.

Here’s what is happening on the ASX 200 today:

Corporate Travel Management shares to return

The Corporate Travel Management Ltd (ASX: CTD) share price is falling on Friday after raising $75 million through an institutional placement. These funds were raised at a 5.8% discount of $21.00 per new share. Combined with an upcoming $25 million share purchase plan, the proceeds will support the acquisition of the Australia and New Zealand corporate and entertainment travel businesses of Helloworld Travel Limited (ASX: HLO).

Healius and Sonic announce acquisition

Pathology companies Healius Ltd (ASX: HLS) and Sonic Healthcare Limited (ASX: SHL) have both announced acquisitions this morning. Healius is acquiring leading bioanalytical laboratory company Agilex for an enterprise value of $301.3 million. Whereas Sonic has announced the acquisition of US-based medically led anatomical pathology company, ProPath for an undisclosed fee. The deal will be funded from cash and available debt lines and be immediately earnings per share accretive.

BNPL shares sold off

It has been a very bad day for buy now pay later (BNPL) shares such as Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P). This follows news that US authorities have launched an investigation into the BNPL sector. The US Consumer Financial Protection Bureau is looking to see if BNPL players need to be better regulated and if US consumers are adequately protected.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday is the St Barbara Ltd (ASX: SBM) share price with a gain of 6%. This follows a rise in the gold price overnight. The worst performer has been the Afterpay share price with a 7% decline following news of the US investigation into the BNPL sector.

The post ASX 200 (ASX:XJO) midday update: BNPL shares sold off, Corporate Travel returns appeared first on The Motley Fool Australia.

More reading

• Zip (ASX:Z1P) share price dives 8% amid US concerns and Sezzle merger rumbles
• Sonic Healthcare (ASX:SHL) share price struggles despite US acquisition
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• Corporate Travel Management (ASX:CTD) share price drops after raising $75m
• Healius (ASX:HLS) share price falls despite $300m acquisition

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Corporate Travel Management Limited and Sonic Healthcare Limited. 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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The Zip Co Ltd (ASX: Z1P) share price is tumbling as the United States puts pressure on buy now, pay later (BNPL) providers. Additionally, reports that talks of a merger with Sezzle Inc (ASX: SZL) hit the rocks are swirling on Friday.

At the time of writing, the Zip share price is trading at $4.11, 7.64% lower than its previous close.

Let’s take a look at all that might be weighing on the BNPL giant’s shares today.

Zip share price tumbles amid heat from Washington

The Zip share price is having a rough day amid the launch of an inquiry by the United States Consumer Financial Protection Bureau (CFPB).

The body has issued orders to 5 major BNPL companies – Zip, Afterpay Ltd (ASX: APT), Klarna, Paypal Holdings Inc (NASDAQ: PYPL), and Affirm Holdings Inc (NASDAQ: AFRM) – to collect information on the risks and benefits of their offerings.

CFPB is worried about increasing debt, regulatory arbitrage, and data harvesting in the technologically advancing market.

It notes people can enter BNPL loans with multiple providers, leaving them vulnerable to financial hardship.

The body’s concerns mirror those of Financial Counselling Australia. It recently found the number of people approaching Australian financial counselling services with BNPL debt increased more than 50% over the last 12 months.

Additionally, CFPB believes some BNPL providers might be improperly evaluating which consumer protection laws apply to their services.

Finally, it’s concerned by BNPL providers’ ability to retain data on customers’ payment histories. It noted some companies have used this data to create “closed-loop shopping apps” with partner retailers.

CFPB states it working with international partners – some of which are in Australia – to conduct the inquiry.  

Rumoured Sezzle merger reportedly in the bin

Potentially also weighing on the Zip share price today are reports it has both entered and exited merger talks with fellow ASX-listed BNPL provider, Sezzle.

According to The Australian, the companies scrapped unverified discussions of a merger due to a disagreement on valuations.

The publication claims Zip abandoned the talks after Sezzle asked for more than Zip was willing to offer.

The post Zip (ASX:Z1P) share price dives 8% amid US concerns and Sezzle merger rumbles appeared first on The Motley Fool Australia.

More reading

• ASX BNPL shares tumble today amid US probe
• Why Blackmores, Mesoblast, Vulcan, and Zip shares are sinking
• Why is the Sezzle (ASX:SZL) share price tumbling 7% today?
• Zip (ASX:Z1P) shares just topped these end-of-year rankings
• What has experts worried about ASX BNPL shares in 2022?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended PayPal Holdings. 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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