Category: Stock Market

It’s a good day to be an ASX investor, and an even better one to be an ASX-listed technology company.

The tech sector is leading the market’s gains today, as buy now, pay later (BNPL) favourites such as Afterpay Ltd (ASX: APT) are among those leading the charge.

The S&P/ASX All Technology Index (ASX: XTX) is soaring today, gaining 2.72%, or 85.3 points.

The sector’s day in the sun is helping to push the broader market higher. Right now, the S&P/ASX 200 Index (ASX: XJO) is 1.07%, or 78.3 points, higher than it finished yesterday’s session.

Additionally, the All Ordinaries Index (ASX: XAO) is gaining 1.14% or 86.6 points.

Today’s increases follow the 1.02% gain that tech heavy Nasdaq index managed to chalk up overnight.

Let’s take a closer look at how some ASX tech favourites are performing today.

ASX tech shares are out in front

The ASX tech sector is leading the market today, helping to boost the ASX 200 more than 1% higher.

The sector is being boosted by big name share prices such as that of Afterpay, which has gained 4.5% today on the back of the Square Inc (NYSE: SQ) share price’s similarly exuberant overnight gain.

Other BNPL stocks are also soaring. Leading the index’s charge is the Splitit Ltd (ASX: SPT) share price, which has gained a whopping 10.8% today to trade at 46 cents.

Splitit’s stock is soaring on news its chair, Dawn Robertson, bought 100,000 shares in the company, paying between 34.5 cents and 35.5 cents apiece.

The share price’s of Ioupay Ltd (ASX: IOU), Sezzle Inc (ASX: SZL), and Laybuy Holdings Ltd (ASX: LBY) are all also in the green.

Bringing up the rear of the sector, is the Netlinkz Ltd (ASX: NET) share price. It has plummeted 4.5% despite only silence from the company.

The post ASX tech shares are leading the market’s gains on Thursday appeared first on The Motley Fool Australia.

More reading

• Why the Afterpay (ASX:APT) share price is charging 4.5% higher
• The Square share price jumped 4% overnight. What could this mean for Afterpay (ASX:APT) shares?
• Afterpay (ASX:APT) share price slips despite new ‘Retro’ launch
• This Afterpay-backed company is listing on ASX next week
• What percentage of Afterpay (ASX:APT) shares are owned by insiders?

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 shares of and has recommended AFTERPAY T FPO and Square. 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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The AMP Ltd (ASX: AMP) share price is climbing by almost 6% at the time of writing on Thursday. While that might not seem significant to most investors, the reality is it’s the first time in 9 trading days that AMP shares are rising.

Yes, the last time that shares in the Aussie wealth manager closed the day higher was back on Friday, 10 September.

Investors appear to be loading up on AMP today, so what’s going on?

Why the AMP share price is climbing today

There have been no new announcements from AMP to explain today’s surge. In fact, the last price-sensitive announcement was back on 12 August. That was when AMP released its half-year results to the market for the period ended 30 June 2021.

Some of the key takeaways from that result include:

• Net profit after tax up 57% on the prior corresponding period (pcp) to $181 million
• Increased Australian wealth segment assets under management (AUM) up 8% on pcp to $121 billion
• Controllable costs (excluding AMP Capital) down 6% on pcp to $387 million
• No interim dividend

The AMP share price has been under pressure since its results release. A broader decline in the S&P/ASX 200 Index (ASX: XJO) hasn’t helped the ASX 200 financials share price either.

However, things appear to be turning around for the time being. AMP shares are outperforming the index, which is up 1.2% in today’s session.

Interestingly, there has been some insider buying of AMP shares in recent weeks. When directors and executives snap up shares, it can send a signal that they believe the company’s prospects are strong and the current price is good.

AMP Chair Debra Hazelton and Non-Executive Directors Michael Sammells, Andrea Slattery and Kate McKenzie all bought shares in August.

While investors can’t read too much into these transactions, it is an interesting side note when looking at the current AMP share price.

Foolish takeaway

The AMP share price is rebounding strongly on Thursday. That’s despite no news from the Aussie wealth manager as investors look to buy following recent declines.

The post AMP (ASX:AMP) share price climbs 6% in first upwards move in 2 weeks appeared first on The Motley Fool Australia.

More reading

• How has the AMP (ASX:AMP) share price been performing since reporting results?
• Here are the ASX 200’s most active shares this Tuesday
• Just when you thought the AMP (ASX:AMP) share price couldn’t sink any lower…
• The shrinking AMP (ASX:AMP) share price now comes with one benefit
• AMP (ASX:AMP) share price hits fresh lows amid advisory board resignations

Motley Fool contributor Ken Hall 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 Metalstech Ltd (ASX: MTC) share price has been among the best performers on the Australian share market on Thursday.

In afternoon trade, the gold explorer’s shares are up a sizeable 26% to a 52-week high of 53 cents.

This means the Metalstech share price is now up a whopping 150% since the start of the year.

Why is the Metalstech share price rocketing?

The Metalstech share price is rocketing higher today following the release of a positive announcement relating to its Sturec Gold Mine.

The Sturec Gold Mine is located in central Slovakia between the town of Kreminica and the village of Lucky. This is approximately 150km north east of the country’s capital, Bratislava.

According to the release, the company’s phase two diamond drilling program has returned some impressive results.

The release explains that following detailed geological logging and sampling, visible gold at 81.35 metres was identified within a quartz filled vein, variably rich in fine to very fine grained sulphides.

This has the potential to be a very big positive. Though, the company has warned that visual observations should not be taken as a substitute for appropriate laboratory analysis. Those laboratory assay results will be reported when they are received and interpreted.

Nevertheless, the company is very pleased with what it has seen and intends to expedite processing to find out the true extent of the grade.

Metalstech’s Chairman, Russell Moran, commented on the news. He said: “This is an extraordinary example of visible gold and the potentially mineralised zone in the intersection looks to be 37m in length. The hole will be processed on a rushed basis as we are eager to see just how high the grade runs in that area.”

No doubt all eyes will be on the Metalstech share price when further details are released.

The post Why the Metalstech (ASX:MTC) share price is rocketing 26% higher today appeared first on The Motley Fool Australia.

More reading

• Metalstech (ASX:MTC) share price leaps 7% on drilling update
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• Why Metalstech, Mineral Resources, TechnologyOne, & Webjet are storming higher
• Why the Metalstech (ASX:MTC) share price is rocketing 16% on Friday

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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The Race Oncology Ltd (ASX: RAC) share price has soared into the green this past month, and now trades at $3.50 apiece.

Whereas the S&P/ASX 200 Health Care Index (XHJ) has gained a paltry 0.85% in the last month of trading, Race Oncology shares have climbed over 19%.

Here’s why the Race Oncology share price has outpaced its benchmark lately.

What’s fuelling the Race Oncology share price higher?

Race Oncology’s shares have been on the move after two key updates in the company’s growth narrative.

Firstly, Race announced that the first patient had been enrolled in a Phase 1/2b trial investigating the company’s Zantrene label.

The trial is examining the effectiveness of Zantrene as a 3-drug therapy in a condition known as relapsed/refractory Acute Myeloid Leukaemia (AML).

AML is a hot research area at the moment, with several large pharmaceutical companies investing heavily into finding treatments and cures for the condition.

Race’s clinical trials are set to deliver outcomes in the coming months, after already demonstrating “compelling efficacy” of the Zantrene label in earlier studies.

Afterwards, the company released its annual report on August 26, where it outlined several investment highlights.

Being that Race Oncology is primarily concerned with the development of oncology drugs, it’s important to note progressions around this faction of the business.

Race entered into several pre-clinical collaborations over the last reporting period, each investigating Zantrene’s safety and efficacy in various cancers.

For instance, it has teamed up with researchers at the University of Newcastle to explore Zantrene as a novel treatment for renal cancer.

It also entered into another collaboration with Newcastle Uni to investigate Zantrene as a treatment for melanoma.

Aside from this, investors may be excited about Race’s “three pillar strategy” that it intends to act upon to achieve “contemporary use” of Zantrene.

Approval of Zantrene would be big news for the company, so it thinks.

Race Oncology share price snapshot

The Race Oncology share price has gained over 100% this year to date and has extended its climb over the past 12 months to 354%.

These results have far outpaced the S&P/ASX 200 index (ASX: XJO)’s return of around 25% over the past year.

The post Why is the Race Oncology (ASX:RAC) share price up 18% in a month? appeared first on The Motley Fool Australia.

More reading

• Why the Metalstech (ASX:MTC) share price is rocketing 26% higher today
• Sydney Airport (ASX:SYD) share price struggles amid latest takeover blow
• Why is the Fenix (ASX:FEX) share price surging 10% on Thursday?
• Sandfire Resources (ASX:SFR) share price frozen amid acquisition and cap raise
• APA Group (ASX:APA) share price jumps on strong support for its takeover bid

The author Zach Bristow 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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The S&P/ASX 200 Index (ASX: XJO) is shaking off the shackles today, it seems.

The ASX 200 is giving investors a healthy 1.1% bump so far at the time of writing and is now trading at 7,377 points.

But one ASX 200 share isn’t joining the party. That’s Sydney Airport Holdings Pty Ltd (ASX: SYD).

The Sydney Airport share price is bucking the ASX 200’s positive mood today. The airport operator is down 0.36% to $8.21 a share so far.

So, why is this blue-chip share not keeping up with the ASX 200?

An avalanche of takeover offers

Well, if you weren’t aware, the most consequential catalyst behind the Sydney Airport share price of late has been the avalanche of potential takeover offers received by the company.

This saga has been going on for a few months now. But the stakes were raised once again just last week.

That was when a consortium of potential investors, including IFM Investors and QSuper, increased their prior bid of $8.45 a share for Sydney Airport to $8.75 a share.

The Sydney Airport board told investors on Monday that it is satisfied with this offer. It said it will grant the consortium “due diligence on a non-exclusive basis”. This allows the offer to move forward towards a binding proposal.

However, we got some news today that might be impacting the Sydney Airport share price in this light.

What’s keeping the Sydney Airport share price grounded today?

According to a report in the Australian Financial Review (AFR) today, some investors are planning on voting against the proposed takeover offer. This protest vote is reportedly on the grounds that “mega funds like IFM Investors are forcing smaller shareholders out of good Australian companies”, according to the article.

Michael Pinn, director of financial advisory group Pinn Deavin and a long-term Sydney Airport shareholder told the AFR:

The takeover parties are offering $8.75 per share because they think it is worth more than that. There is no long-term windfall in this offer for the current shareholders …

This behaviour forces small investors to either consider poorer quality investments, or to allow these mega funds to manage their money for them so as to access the better quality investments.

If enough Sydney Airport shareholders share a similar sentiment, then it could potentially throw a spanner into the proverbial takeover works.

The takeover offer hinges on at least 50% of voting shareholders casting an affirmative vote.

Sydney Airport share price snapshot

Sydney Airport shares are up 28% year to date and 41.5% over 12 months.

At the current Sydney Airport share price, the company has a market capitalisation of $22.18 billion.

The post Sydney Airport (ASX:SYD) share price struggles amid latest takeover blow appeared first on The Motley Fool Australia.

More reading

• APA Group (ASX:APA) share price jumps on strong support for its takeover bid
• Why the Transurban (ASX:TCL) share price just got upgraded by a leading broker
• Sydney Airport (ASX:SYD) board recommends revised takeover proposal. What could this mean for shareholders?
• This year’s ASX 200 Santa Rally to get a whopping $84bn cash boost
• Lithium surge, Sydney Airport takeover, ACCC torches Qantas deal. Scott Phillips on Nine’s Late News

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 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 Fenix Resources Ltd (ASX: FEX) share price is surging today despite no price-sensitive news having been released by the company.

And today’s gain is only the latest extreme movements faced by Fenix’s stock this week. The company’s share price plummeted a massive 22% on Monday.

Today, it seems to be making up some of its lost ground. At the time of writing, the Fenix share price is 23 cents, 9.52% higher than its previous close.

Let’s take a look at what’s been driving the iron ore producer’s stock this week.

What’s driving Fenix’s stock this week?

The Fenix share price is back in the green again today despite no price-sensitive news from the company having hit the ASX.

However, we have heard some non-price sensitive news from Fenix. Last night, the company announced its managing director, Rob Brierley, sold 6 million shares in the company for around 21 cents each. Although, it was noted that the sale was meant to fund a real estate purchase, rather than to simply cash out.

Oddly enough, this news might have sparked the market’s enthusiasm towards Fenix’s stock. Despite it insinuating, the company’s boss believes 21 cents is a worthy price.

Unfortunately for Brierley, he might have chosen the wrong day to sell his shares. If he had palmed off the stock on Friday, he could have got substantially more bang for his buck.

That’s because Monday saw the Fenix share price plummet 22%. It then fell another 10% over the course of Tuesday and Wednesday.

That means today’s uptick could be the market’s way of correcting itself after this week’s tumble.  

As The Motley Fool Australia reported at the time, the company’s stock underwent a sell-off on Monday after its ex-dividend date passed.

Prior to its ex-dividend date, Fenix was sporting a massive 17.8% dividend yield.

Fenix Resources share price snapshot

Fortunately, the Fenix share price is gaining back some of its losses today. Though, it’s not quite enough to get the company’s stock back into the green.

Right now, shares in Fenix are trading for 4% less than they were at the start of 2021. However, they have gained 64% since this time last year.

The post Why is the Fenix (ASX:FEX) share price surging 10% on Thursday? appeared first on The Motley Fool Australia.

More reading

• Why is the Fenix Resources (ASX:FEX) share price crashing 27% today?
• Fenix Resources (ASX:FEX) share price eyes 16% maiden dividend
• Worried about iron ore prices? This ASX share has prices locked in at A$230/tonne

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. 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 Sandfire Resources Ltd (ASX: SFR) share price is at a standstill after the company requested a trading halt and announced an acquisition and capital raising.

Before the pause in trading, Sandfire shares opened the session at $6.22 apiece, up from $6.06 a day earlier.

Here’s what the copper miner has told the market.

What did Sandfire announce?

Sandfire advised that it has entered into a binding sale and purchase agreement with Trafigura and Mubadala Investment Company to acquire 100% of Minas De Aguas Tenidas (MATSA) on a consideration of US$1.86 billion.

This consideration implies a 4.8x FY21 EBITDA valuation multiple to acquire MATSA. The company says this compares favourably to the median trading multiple of its global peers.

The agreement delivers the MATSA mining complex in Spain to Sandfire. The complex has three underground mining operations with “state of the art infrastructure”, according to the announcement.

The deal gives Sandfire exposure to a long-life and first-quartile low-cost operation with about 12 years of mine life.

The deal also transforms Sandfire into one of Australia’s largest copper producers.

To finance the transaction, the company intends to issue an $897 million debt facility secured by MATSA and conduct a $1.2 billion equity raise.

Sandfire will also use $297 million of its own cash and draw down $200 million from its existing debt facility.

AustralianSuper has committed to subscribe for $120 million of the placement offer. It can sub-underwrite an additional $150 million if need be.

The acquisition is expected to be “accretive to Sandfire’s earnings and cash flow per share in its first year of full ownership”.

The transaction is expected to be finalised in FY22, probably around March 2022 after regulatory approval is granted in Spain.

What did management say?

Speaking on the announcement, Sandfire’s CEO, Karl Simich said:

Base metal assets which offer this combination of scale, grade, mine life and exploration upside are extremely rare globally. The MATSA acquisition transforms Sandfire into a first quartile copper producer of global scale and allows us to leverage our skill set to deliver on our growth ambitions to create one of the highest quality and most compelling copper exposures on the ASX.

Regarding the financing set-up, Simich explained:

The high-quality debt and equity funding package we have secured ensures that we can fully-fund the acquisition of this Tier-1 asset while retaining balance sheet flexibility to deliver our Motheo Copper Mine in Botswana and maintain a global exploration program.

Sandfire Resources share price snapshot

The Sandfire Resources share price has had a bumpy year but is still 16% higher since 1 January.

The share price has also pushed 48% higher over 12 months.

Yet Sandfire shares are trading down this past week, falling 2% in the red.

The post Sandfire Resources (ASX:SFR) share price frozen amid acquisition and cap raise appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• The latest ASX 200 mining shares to get hit by broker downgrade
• Top brokers name 3 ASX shares to buy today
• Why BlueBet, Dicker Data, Immutep, & Sandfire are charging higher
• Sandfire Resources (ASX:SFR) share price advances on record $170m net profit

The author Zach Bristow 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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The APA Group (ASX: APA) share price is outperforming today after its largest shareholder and several experts voiced support for its takeover bid for Ausnet Services Ltd (ASX: AST).

Shares in the gas pipeline owner jumped 1% to $8.64 in morning trade. While that’s on par with the S&P/ASX 200 Index (Index:^AXJO), the APA share price is running ahead of its peers as the risk-on mood of investors is leaving defensive shares behind.

The Spark Infrastructure Group (ASX: SKI) share price gained 0.4%, while Sydney Airport Holdings Pty Ltd (ASX: SYD) share price dipped 0.1% at the time of writing.

Takeover optimism lifts the APA share price

Investors are upping their bets that APA could become the front runner in the $10 billion takeover tussle for Ausnet.

UniSuper, which owns 14% of APA, is backing its bid even though APA is paying a high price for the electricity infrastructure business.

UniSuper chief investment officer, John Pearce, said the takeover will make APA a more diversified business, reported the Australian Financial Review.

Strategic benefits for the merger

This a strategically important move with the world moving towards decarbonisation. The ASX bidder currently makes all of its revenue from gas. Merging Ausnet’s poles and wires assets will give APA exposure to green energy projects.

More significantly, APA’s cost of debt could fall as investors will view its greener credentials more favourably.

There’s another reason why Pearce likes the idea of APA swallowing Ausnet. The deal would mean APA is likely to abandon plans to acquire gas assets in the US.

Less risky growth strategy for the APA share price

“It’s always more risky doing something overseas relative to your home base,” he told the AFR.

“So if you’re going to pay up for an asset – and you have to pay up for assets wherever you are in the developed world – it has to diversify your business and ideally, it’s going to be in your home base.”

Takeover battle for Ausnet

But the takeover is far from a sure thing. If anything, APA looks to be the underdog in the love triangle. Brookfield also lobbed a bid for Ausnet and has exclusivity on doing due diligence despite its lower offer.

The Canadian infrastructure group is offering $2.50 cash a share for Ausnet. APA is offering cash and scrip that’s worth around $2.60, although the offer price will change with APA’s share price.

The speculation is now that APA will come back with a knockout offer for Ausnet to convince the target to break the exclusivity with Brookfield.

Greater accountability

It isn’t only Pearce that is wishing APA success in the takeover battle. Renewable power industry experts also believe that Australia will benefit more if APA beats the Canadians.

This is because there is more transparency with the APA-Ausnet group given that the merged entity will remain ASX listed.

On the other hand, Brookfield has fewer reporting obligations.

The post APA Group (ASX:APA) share price jumps on strong support for its takeover bid appeared first on The Motley Fool Australia.

More reading

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• Expert gives 7 tips for investors in ASX shares during a market correction
• 5 things to watch on the ASX 200 on Thursday
• Worried about a looming ASX 200 crash? Read this…

Motley Fool contributor Brendon Lau 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 owns shares of and has recommended APA Group. 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 Identitii Ltd (ASX: ID8) share price is rocketing to uncharted territory for 2021. This comes after the financial technology company announced that it had signed a contract with Standard Chartered Australia.

At the time of writing, Identitii shares are swapping hands for 28.5 cents apiece, up 18.75%. It’s worth noting its shares reached as high as 32 cents in early morning trade, a new 52-week high — and a gain of 33% from market open.

Let’s take a look at what the company updated the ASX with before market open.

Identitii adds new contract

In news driving the Identitii share price, the company advised it has secured a Master Technology Agreement (MTA) and a 3-year licence agreement with Standard Chartered Australia.

Under the terms of the deal, Standard Chartered Australia will licence Identitii’s new software-as- a-service (SaaS) platform in Australia. However, there is scope to further extend this service to international markets.

Identitii highlighted that Standard Chartered Australia is the second global correspondent bank to sign a master technology (services) agreement. In addition, it’s the fourth global brand to sign a multi-year contract.

Identitii stated that activity and revenue are laid out in order forms (statements of work). However, the first initial job is worth $0.3 million.

Either party is able to terminate the contract for any reason, but must provide at least 90 days’ notice.

It’s no surprise to see the Identitii share price higher today as the company has had a busy 2021. Identitii filed patent applications for its intellectual property (IP) in the United States, and launched its new SaaS platform.

About the Identitii share price

Founded in 2014, Identitii is an Australian-based company that specialises in designing and developing financial software. The group serves in helping financial institutions eliminating anti-money laundering (AML) and counter terrorist financing (CTF) compliance risk.

Over the past 12 months, the Identitii share price has gained around 20%, and year to date has advanced by approximately 80%.

Based on today’s price, Identitii commands a market capitalisation of roughly $44.10 million, with about 152 million shares on issue.

The post Identitii (ASX:ID8) share price leaps 19% on new licence agreement appeared first on The Motley Fool Australia.

More reading

• Why the Identitii (ASX:ID8) share price is up 11% today
• Why the Identitii (ASX:ID8) share price has surged 180% in a month

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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The Afterpay Ltd (ASX: APT) share price has been among the best performers on the S&P/ASX 200 Index (ASX: XJO) on Thursday.

In early afternoon trade, the buy now pay later (BNPL) provider’s shares are up 4.5% to $131.88.

This compares favourably to the ASX 200’s gain of 1.1%.

Why is the Afterpay share price rising?

The catalyst for the rise in the Afterpay share price on Thursday has been a rise in the Square share price overnight.

As readers will be aware, at the start of August, US payments giant Square announced an agreement to acquire Afterpay.

However, rather than offer a fixed price, Square will be acquiring Afterpay in an all-scrip deal. This will see Afterpay shareholders receive 0.375 shares of Square Class A common stock for every share they own.

In light of this, until the completion of the transaction, the Afterpay share price and the Square share price will be intrinsically linked.

This means that if the Square share price rises 20%, so too should the Afterpay share price. And vice versa if it were to fall. The same also applies with foreign exchange rates, with the offer becoming more valuable if the Australian dollar weakens against the US dollar.

So what’s driving today’s gain?

The Afterpay share price was given a boost last night when the Square share price rose 4% following a strong trading session. This was particularly the case for tech shares, which outperformed.

This appears to have been driven by improving investor sentiment after positive news relating to Evergrande in China.

In addition to this, the recent highly successful IPO of fellow payments company competitor Toast appears to have given investor sentiment a boost in the sector.

Afterpay shareholders will no doubt be hoping for more gains by Square’s shares in the coming months ahead of the expected transaction completion in the first quarter of calendar year 2022.

The post Why the Afterpay (ASX:APT) share price is charging 4.5% higher appeared first on The Motley Fool Australia.

More reading

• The Square share price jumped 4% overnight. What could this mean for Afterpay (ASX:APT) shares?
• Afterpay (ASX:APT) share price slips despite new ‘Retro’ launch
• This Afterpay-backed company is listing on ASX next week
• What percentage of Afterpay (ASX:APT) shares are owned by insiders?
• Why Afterpay, AnteoTech, Cettire, & Vulcan shares are storming higher

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 shares of and has recommended AFTERPAY T FPO and Square. 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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