It’s another bumper day so far for ASX lithium shares. Heavyweights Orocobre Limited (ASX: ORE) and Pilbara Minerals Ltd (ASX: PLS) are among those leading the charge, up 3.6% and 7.2% respectively.

Emerging US-based lithium producer, Piedmont Lithium Inc (ASX: PLL), is surging 10% to a near 3-month high of 88 cents.

Coined as Australia’s next lithium producer, Core Lithium Ltd (ASX: CXO) is up 5.2% to 60 cents, not far off last week’s all-time high of 66 cents. This morning, Core announced that construction has kicked off for its flagship Finniss lithium project. The company said its Finniss project is the”only new Australian company forecast to initiate lithium production in 2022″.

Elsewhere, explorers including Lake Resources N.L. (ASX: LKE), AVZ Minerals Ltd (ASX: AVZ), and Liontown Resources Limited (ASX: LTR), are also catching bids, rallying 7.9%, 7.8%, and 6.7%, respectively.

What’s driving ASX lithium shares?

Lithium ETF hits fresh all-time high overnight

The Global X Lithium & Battery Tech ETF (NYSEARCA: LIT) surged 3.9% overnight to a fresh all-time high of US$91.26. The ETF is up 11.7% in October alone and 47.5% year-to-date.

The Lithium ETF invests in the full lithium cycle, from miners and refiners through to battery production and electric vehicles. Its performance provides a useful gauge as to how the overall sector is performing.

Its top holdings include the world’s largest provider of lithium for electric vehicle batteries, Albemarle, and China’s largest lithium player, Ganfeng Lithium.

The ETF has smaller allocations in ASX lithium shares including Mineral Resources Limited (ASX: MIN), Pilbara Minerals, and Orocobre.

Tesla joins the US$1 trillion club

Shares in Tesla Inc (NASDAQ: TSLA) crossed the $1,000 a share mark for the first time on record. This brought its market capitalisation to an eye-watering US$1 trillion.

The Tesla stock price surged overnight amid news rental car company, Hertz, was planning to buy 100,000 Teslas to add to its existing fleet.

The bullish news and price action for Tesla has likely propped up ASX lithium shares on Tuesday.

The post Why ASX lithium shares are surging higher on Tuesday appeared first on The Motley Fool Australia.

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• Tesla stock price rally places it in the trillion-dollar club
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• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor Kerry Sun 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 Tesla. 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 Neometals Ltd (ASX: NMT) share price is rocketing in early trade, up more than 14.69% to $1.015 cents per share. That’s smashed the all-time closing high of 95 cents reached on 24 September.

Below we take a look at the battery recycling update released to the ASX this morning.

What battery recycling update was announced?

Neometals’ share price is soaring after the company reported its joint venture company Primobius GmbH has completed the commissioning of its lithium-ion battery recycling demonstration plant.

Primobius is jointly owned by Neometals and SMS group GmbH.

According to the release, all leaching, purification, and recovery circuits of the Stage 2 hydrometallurgical refinery were successfully wet commissioned at the German-based demonstration plant.

Neometals’ share price could also be getting a boost from the report that the demonstration plant’s trial on electric vehicle lithium-ion batteries will kick off early in November, as planned. The trial is intended to demonstrate the “safe, efficient, green recycling process to potential feedstock supply and product offtake partners”.

Commenting on the progress, Neometals’ managing director Chris Reed said:

This is another important milestone for Primobius. The demonstration trial is the conclusive phase of our evaluation with SMS and represents the key step in bringing our pipeline of potential plants into commercial reality.

Inbound interest from the global EV supply chain in our efficient, green recycling process is exceptional. This interest coupled with the scalability and deliverability from our partnership with a leading global plant builder in SMS, augurs well for the achievement of our goal to become the leading recycling solution in the Western world.

Neometals share price snapshot

The Neometals share price has been a standout performer over the past 12 months, soaring 418%. To put that into some context, the All Ordinaries Index (ASX: XAO) is up 22% year-on-year.

Over the past month Neometals’ shares have gained 4%.

The post Up 418% in 1-year, why the Neometals (ASX:NMT) share price is surging 14% today appeared first on The Motley Fool Australia.

More reading

• Why ASX lithium shares are surging higher on Tuesday
• Volpara (ASX:VHT) share price pushes higher on record quarterly update
• Suncorp (ASX:SUN) share price wobbles amid natural hazard costs update
• Regis Resources (ASX:RRL) share price drops on quarterly update
• Facebook (NASDAQ:FB) just announced a monster US$50 billion share buyback program

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 Volpara Health Technologies Ltd (ASX: VHT) share price is climbing today following the release of the company’s quarterly report.

At the time of writing, the healthcare technology company’s shares are up 1.17% to $1.295.

How did Volpara perform for Q2 FY22?

According to its release, Volpara advised record sales and cash inflows for the 3 months ending 30 September.

In particular, cash receipts from customers totalled NZ$7.1 million (A$6.79 million), an increase of 11% on the previous quarter. Compared against the prior corresponding period, this metric grew 52% — or 68% in constant currency terms.

Subscription-based receipts continued to accelerate, representing more than NZ$6.9 million (A$6.60 million) for the 3 months. This is a jump of 63% year-on-year, or roughly 74% in constant currency.

Net operating cash outflow came to NZ$3.8 million (A$3.63 million), consistent with Q2 FY21. Some material supplier contract renewals, such as its annual insurance program, kept the costs in line.

Volpara noted that it closed the quarter with cash of NZ$25 million (AS23.91) on hand and no debt.

On the Software-as-a-Service (SaaS) front, annual recurring revenue (ARR) stood at US$20.4 million (A$27.24) million. Contracts were signed across the company’s full product suite as both standalone sales and platform deals. Many existing customers also increased contracts with Volpara whether by adding on products or expanding use of existing products.

The average revenue per user (ARPU) improved to US$1.46 (A$1.95), up 5% on the prior quarter. Its legacy MRS support contracts were heavily weighted towards the lower ARPU ranges, while its subscription-based products weighted more to the higher ARPUs.

Volpara group CEO Dr Ralph Highnam commented:

Q2 is traditionally our weakest quarter for sales, and yet today we’ve shown that we’ve had a record quarter not only for sales but also cash inflows.

…Our job now is to keep that momentum and passion for what we do as we go through the second half of the year, keeping in mind potential winter waves of COVID in the northern hemisphere.

Volpara share price summary

The past 12 months have been a disappointing run for investors, with the company’s shares down almost 11%. When looking at year-to-date, its losses are hovering around 9% over the period.

Based on today’s price, Volpara presides a market capitalisation of roughly $329 million and has approximately 251.3 million shares outstanding.

The post Volpara (ASX:VHT) share price pushes higher on record quarterly update appeared first on The Motley Fool Australia.

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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. owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. 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 Suncorp Group Ltd (ASX: SUN) share price is edging lower on Tuesday. It appears investors are relatively unfazed by the financial services company’s latest natural hazard update.

At the time of writing, shares in Suncorp are trading slightly lower to $12.15, down 0.37%. As a result, the company is situated 8% away from its 52-week high.

Let’s take a closer look at Suncorp’s latest release.

More than expected

When it comes to being in the business of insurance, it’s important to accurately forecast potential claims to price premiums effectively.

However, mother nature often doesn’t abide by modelling and predictions. This can sometimes lead to insurers being left out of pocket. This is why shareholders of Suncorp pay close attention to natural hazard claims compared to provisions.

Suncorp has informed the market of the latest natural hazard claims figures since 1 July 2021. This update follows a period of wild weather across the east coast of Australia. According to the release, there have been five declared storm events in October alone, putting the Suncorp share price in focus.

Based on preliminary data, lodgement patterns, and historical average claims costs, Suncorp has updated its total estimated natural hazards costs to between $382 million and $492 million. October itself has increased this estimate by between $140 million and $220 million.

Commenting on the company’s response to recent wild weather, Suncorp Group CEO Steve Johnston said:

Our customer support team is on the ground in Coffs Harbour to support our customers affected by the hail
event. Our national footprint means we have been able to respond quickly to this event and ensure our customers
get back on their feet as quickly as possible.

We will continue to work with governments to ensure we can get tradespeople and assessors on the ground and
across borders as necessary.

Furthermore, Suncorp had provisioned $980 million in natural hazard costs for the full year. Based on this information, 39% to 50% of this provision has already been accounted for, only four months into the financial year.

Suncorp share price snapshot

Despite the higher than anticipated natural hazard costs, the Suncorp share price has been performing well. In the past 12 months, the financial services company has gained 40%. Comparatively, Insurance Australia Group Ltd (ASX: IAG) is up 2% year-over-year.

As covered in a previous article, Suncorp has managed to remain profitable during the last 12 months. Meanwhile, IAG suffered a net loss after tax of $427 million in FY21.

On top of that, the Queensland-based financial company raised $350 million in August. This may have quelled investors’ worries of being out of pocket on insurance claims.

The post Suncorp (ASX:SUN) share price wobbles amid natural hazard costs update appeared first on The Motley Fool Australia.

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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. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Insurance Australia 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened 

Shares of Pinterest (NYSE: PINS) fell on Monday after PayPal (NASDAQ: PYPL) chose not to pursue a business combination.

As of 3:30 p.m. EDT, Pinterest’s stock price was down more than 12%.

So what

PayPal was reportedly in talks to buy Pinterest for as much as $70 per share. The deal would have valued the popular social media platform at roughly $45 billion.

However, those talks apparently proved fruitless. In a statement posted to its investor relations website, PayPal said “it is not pursuing an acquisition of Pinterest at this time.”

Now what

PayPal was believed to be pursuing Pinterest to accelerate its plan to build a “Super App” that would provide a wide array of financial and e-commerce services to its users. But investors questioned the benefits of purchasing a social media platform that has seen its user growth slow in recent quarters.

Moreover, Pinterest’s monthly active users declined by 5%, to 91 million, in its key U.S. market in the second quarter, as people emerged from pandemic-related lockdowns and spent more time offline. The decline stoked concerns among investors that Pinterest’s most profitable market might already be saturated.

Together, these fears helped to push down PayPal’s share price by more than 10% as the rumors of a potential deal intensified. The market’s poor reaction may have caused PayPal’s management to reconsider its plans.

News that the deal is now off drove Pinterest’s shares lower on Monday. PayPal’s stock price, meanwhile, rallied as much as 6.3%. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Pinterest stock plunged on Monday appeared first on The Motley Fool Australia.

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• Why PayPal investors got nervous on Wednesday

Joe Tenebruso 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 PayPal Holdings and Pinterest. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended PayPal Holdings and Pinterest. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Regis Resources Ltd (ASX: RRL) share price is sliding today, currently trading 2.63% down at $2.22.

Regis shares are on the move as the gold mining and production company released its activities update for the quarter ended 30 September 2021.

Here are the key takeouts.

Regis Resources share price slips as gold production slides

Regis outlined several investment takeaways in its quarterly update, including:

• Gold production across the quarter came in at 101,989 ounces, an 11% decrease from the previous quarter
• All-in sustaining cost (AISC) of $1,521 per ounce, up 9.7% quarter on quarter
• Gold sales for the quarter totalling $179 million at an average realised price of $2,178/oz
• Operating cash flow of $94 million from its Duketon and Tropicana interests combined
• Cash and gold bullion of $208 million, down from $235 million in the previous quarter after capital budgeting decisions
• Maintains FY22 guidance of 460,000 to 515,000 ounces, on an AISC of $1,290 to $1,365 per ounce.

What happened this quarter for Regis Resources?

Regis left the quarter weathering the effects of the pandemic. Gold sales for the quarter were just shy of $180 million on an average realised price of $2,178 per ounce, adjusted for hedging.

Regis said it has absorbed the impacts of the pandemic and the government’s responses to curb the virus via lockdowns.

It reported feeling this impact at the staff level with high turnover as well as increasing competition for high-quality replacement candidates.

Aside from this, the company also wound back its gold production by around 11% for the quarter to almost 102,000 ounces.

This came in on an AISC of $1,521 per ounce, roughly 10% higher than the quarter prior.

Drilling beneath the main pit at the company’s “latest growth project”, the Garden Well South mine, revealed further strong mineralisation. This indicates the “potential for establishing a new underground resource and potentially an additional underground production area”.

One other headwind the company faced this quarter surrounds the permit process for the McPhillamys Gold project.

Progress to this point has been at a snail’s pace and is “largely outside of the company’s control”. Although, Regis does anticipate some progress to be made in the first half of FY22 on this front.

Regis also left the quarter with $208 million in cash and bullion – down 23% from last quarter – after a flurry of expenditures including a $77 million capital spend, $22 million in dividend payouts to shareholders, a $21 million income tax provision, $17 million for exploration at McPhillamys and $17 million for other expenses.

What’s next for Regis?

On the back of performance this quarter, Regis maintained its full-year FY22 gold production guidance range of 460,000 to 515,000 ounces.

It forecasts this range on an estimated AISC of $1,290 to $1,365 per ounce and growth capital of $155 million to $165 million.

Progress at the company’s Garden Well South underground mine also continues with the first ore expected in the December quarter and stoping to commence sometime in the three months from June to September FY22.

What did management say?

Speaking on the announcement, Regis Resources managing director Jim Beyer said:

The September quarter was a difficult one with the already planned lower production flagged when we provided guidance for FY22 accompanied with some challenges that were not expected.

Beyer went on to add:

It is clear there are risks of further COVID impacts in both supply chains and personnel availability. The mandating of vaccination shots is viewed by Regis as a critical element of the path out of this period of uncertainty and we are actively supporting and planning for this initiative. We note the mandatory nature of the vaccination requirements in Western Australia may result in further near-term labour availability risks.

The Regis Resources share price has struggled this year to date, having posted a loss of 38% since January 1, extending its losses over the last 12 months to 48%.

The post Regis Resources (ASX:RRL) share price drops on quarterly update appeared first on The Motley Fool Australia.

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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 Facebook Inc (NASDAQ: FB) stock price had a pretty decent day of trading over on Monday’s trading session on the US markets. This morning (our time) Facebook shares closed at US$328.69, up 1.26% for the day. In after-hours trading, it was even better, with the social media giant rising a further 1.05% to US$332.15.

That last rise follows the release of Facebook’s earnings report for the quarter ending 30 September (Q3) after US market close this morning.

Facebook announced some healthy increases in revenue, and net income (up 35% and 17% year-on-year respectively). But the company also discussed its monster share buyback program.

Facebook stated that over the quarter just passed, the company “repurchased [US]$14.37 billion of our Class A common stock in the third quarter and had [US]$7.97 billion remaining on our prior share repurchase authorization as of September 30, 2021”.

Not only that, Facebook also stated that “we also announced today a [US]$50 billion increase in our share repurchase authorization”.

Facebook announces another US$50 billion in share buybacks

That’s not an insignificant number. Facebook has a total market capitalisation of US$926.72 billion at its last closing share price. With the US$22.34 billion in allocated and executed buybacks, along with the new US$50 billion just authorised, Facebook will be buying back roughly US$72.34 billion of its own stock. That’s the equivalent of 7.8% of its total market capitalisation – a major boon to investors.

Why is this buyback so good for shareholders?

A share buyback program usually sees the company in question purchase its own shares on the market. The shares are then ‘retired’. While this costs money, it also removes these shares from circulation.

Fewer shares outstanding means that existing shareholders are entitled to a larger cut of the company’s profits. That’s because there are fewer shares to divide the spoils between. It also means that all investors will own a greater percentage of Facebook when the buyback program is complete, than they do today.

Facebook doesn’t pay a dividend. But a share buyback program is an alternative method of returning capital to shareholders. It’s particularly popular with US companies, whose shareholders don’t enjoy the same franking benefits from dividends as we ASX investors do.

So it’s perhaps no surprise that the Facebook stock price has lifted in after-hours trading following the release of this earnings report. After all, its shareholders can look forward to owning roughly 7.8% more of this company when the buyback is completed.

 

The post Facebook (NASDAQ:FB) just announced a monster US$50 billion share buyback program appeared first on The Motley Fool Australia.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen owns shares of Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Facebook. The Motley Fool Australia has recommended Facebook. 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 Crown Resorts Ltd (ASX: CWN) share price is surging this morning after the final report of the royal commission into Crown’s suitability to run Crown Melbourne found the company “unfit” but didn’t recommend stripping the embattled operator’s casino licence.

The 8-month royal commission uncovered what Commissioner Ray Finkelstein described as “disgraceful” conduct. However, the company’s recent reforms have inspired hope it could be suitable to run Crown Melbourne in the future.

Commissioner Finkelstein’s final report was tabled in the Victorian Parliament this morning. It states:

It was inevitable that Crown Melbourne would be found unsuitable to hold its casino licence. No other finding was open. The only difficult question was what should be done in that circumstance.

At the time of writing, the Crown share price is $10.59, 9.63% higher than its previous close.

Let’s take a closer look at Commissioner Finkelstein’s recommendations.

Crown to keep Victorian licence

The Crown share price is soaring after Commissioner Finkelstein recommended the company keep its casino licence under the close watch of a “special manager”.

The special manager, which Commissioner Finkelstein suggested will likely be a firm, will keep a close eye on Crown’s reforms for the next 2 years.

If, after that period, the manager finds Crown hasn’t returned to suitability, the company’s Victorian casino licence will be binned.  

The Victorian royal commission was investigating if money laundering was still occurring at Crown Melbourne, if the casino had breached other laws, restrictions, or obligations to the state, and how it treats those with gambling addictions.  

During the commission, Crown was found to have underpaid around $37 million of casino tax between 2012 and 2021.

Crown was also found to have allowed Chinese patrons to breach Chinese currency laws. It billed $160 million of gambling spending as hotel expenses. The report found doing so contravened both Australian and Chinese laws and likely led to money laundering.

The royal commission also heard from many people who might have been protected from problem gambling if Crown staff had carried out their obligations under Crown Melbourne’s Gambling Code.

The report states:

Crown Melbourne’s board failed to carry out one of its prime responsibilities; namely, to ensure that the organisation satisfied its legal and regulatory obligations…

Although Crown Melbourne rightly deserves criticism for its past misconduct, and no one connected with the organisation is entitled to much sympathy, what tipped the balance against the cancellation of its licence was that Crown Melbourne has, at great financial cost, embarked on a significant reform program led by people of good will and skill. The program is likely to succeed. If it does, that will be to the benefit of Victoria.

Crown share price snapshot

If today’s gains hold, the Crown share price will have taken back the losses it’s made since the Bergin Report first questioned the company’s suitability to run Australian casinos.

Right now, it’s 4.4% higher than it was when the Commissioner Patricia Bergin’s report dropped in February.

The post Crown (ASX:CWN) share price surges 9% as Victorian casino licence pronounced safe appeared first on The Motley Fool Australia.

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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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Once a week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Redbubble Ltd (ASX: RBL) has become the most shorted ASX share after seeing its short interest shoot higher to 10%. A recent disappointing quarterly update from this ecommerce company appears to have given short sellers greater conviction.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest fall week on week to 9.9%. Short sellers appear to believe the market is overvaluing the travel agent’s shares.
• Webjet Limited (ASX: WEB) has short interest of 9.2%, which is down slightly week on week. As with Flight Centre, short sellers don’t appear to believe Webjet’s shares deserve to trade on the multiples they are currently commanding.
• Mesoblast limited (ASX: MSB) has seen its short interest ease week on week to 8.9%. Concerns over this biotech company’s balance sheet continue to weigh on its shares.
• Kogan.com Ltd (ASX: KGN) has short interest of 8.9%, which is down week on week. Although the ecommerce company reported an improved performance last week, its shares have continued to slide.
• Inghams Group Ltd (ASX: ING) has 8.2% of its shares held short, which is flat week on week. There are fears that high grain costs could be squeezing this poultry producer’s margins.
• Zip Co Ltd (ASX: Z1P) has seen its short interest fall notably to 7.8%. Last week Zip released its first quarter update and revealed another record quarterly performance. This may have led to some short sellers closing positions.
• Electro Optic Systems Hldg Ltd (ASX: EOS) has 7.8% of its shares held short, which is down week on week. This defence and space company’s shares are currently halted while it prepares to announce an earnings guidance downgrade and an update on an expected significant contract payment.
• Cooper Energy Ltd (ASX: COE) has 7.1% of its shares held short, which is down week on week. This energy producer’s shares have come under pressure this year due to the poor performance of the Sole Gas operation.
• BHP Group Ltd (ASX: BHP) is a new entry in the top ten with 6.6% of its shares held short. Other than concerns about falling iron ore prices, it remains unclear why this mining behemoth has seen a sudden uptick in short interest.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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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 Electro Optic Systems Holdings Limited, Kogan.com ltd, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings Limited, Kogan.com ltd, and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel 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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The Zip Co Ltd (ASX: Z1P) share price is currently higher amid news that the buy now, pay later operator is linking up with a business in the childcare sector.

According to reporting by The Australian, from next month families will have the ability to pay for childcare at more than 10,000 centres in Australia and New Zealand by using buy now, pay later.

Zip is working with Xplor Education which provides administration and parental support to childcare centres. The buy now, pay later option will be added to payment options with centres linked with Xplor Education.

There are two benefits that will supposedly come from a shift to buy now, pay later. The first is that Xplor Education aims to make childcare more affordable and flexible for families. The other area is saving on time because of how often staff are chasing fees and collecting invoices.

The Australian quoted Xplore Education CEO Mark Woodland, who said:

We know there is demand for tailored payment options in the Australian market, and believe this innovative initiative will improve access to childcare for more families. What we’ve added through the Zip partnership is the ability for parents to spread the cost of childcare, which can be incredibly expensive. Parents usually have to choose between picking up an extra shift and having to choose if their child can go into care or not, and they just don’t have the means to fund it.

One of the areas that investors may look at when deciding what to value the share price is its transaction volume, which Zip is probably hoping will rise from this partnership.

How will it work?

The Australian reported that new customers would be subject to credit checks. However, childcare customers wouldn’t be paying in four equal instalments. Zip’s commercial director, Colin Baines, explained that families can change the monthly repayments to repay multiple invoices.

Mr Bains said:

They’re paying it off on a monthly cycle, so it actually helps from a budgetary and management perspective with customers.

Consumers can opt to pay the minimum amount that’s required with us, or they can choose to make additional payments. We work with our consumers in relation to the payback and how they are paying those moneys back, and we find that only 1 per cent of all our consumers across the platform fall into a position where they can’t make repayments with us.

Zip share price snapshot

The buy now, pay later business is currently up by 1.2% at the time of writing. That compares to the S&P/ASX 200 Index (ASX: XJO) which is up 0.2%.

The broker UBS still rates Zip shares as sell, with a price target of $5.40. One of the things it notes is the recent proposed rules relating to payment surcharges.

The post Zip (ASX:Z1P) share price up amid childcare partnership news 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. owns shares of and has recommended ZIPCOLTD FPO. 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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