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The Santos Ltd (ASX: STO) share price is humming along nicely on the first day of trading this week.

Australia’s second-largest ASX-listed energy company by market capitalisation is swapping hands for $8.55, up 1.8%. Meanwhile, the broader S&P/ASX 200 Index (ASX: XJO) is down 0.36% as tech shares drag it lower.

Investors are still warming up for the day as we pass an hour after the ringing of the opening bell. Notably, the energy sector contains some of the best performers on the market so far today.

What’s firing up the Santos share price?

Persistent upwards pressure on energy commodities such as oil and gas is bad news for consumers. However, energy giants — such as Santos — are basking in the prospects of beefier profits.

Overnight, the price of crude oil strengthened by 1.7% to reach US$118.87 per barrel. Simultaneously, natural gas prices are holding at a near 14-year high of US$8.83 per metric million British thermal unit (MMBtu).

Though, the company must walk a fine line between taking advantage of high prices and doing what it can to avoid price caps. Australian energy retailers have already suffered the fate of increased regulatory intervention as prices soar beyond the bounds of affordability.

Fortunately for the Santos share price, the company announced yesterday that it would work on increasing the domestic gas supply. In a joint effort alongside Beach Energy Ltd (ASX: BPT), Santos will fork out $300 million to hopefully bring an additional 15 terajoules per day of gas to the market by the end of the year.

Santos CEO Kevin Gallagher commented on the move:

This investment will deliver more gas to the domestic market, which is desperately needed. Recent domestic gas supply and price pressures have been caused by a spike in gas-fired power generation to back up renewables and to replace the 30% or more of coal-fired power generation that has been offline or not operating since early May.

The Santos share price has substantially outperformed the ASX index since the beginning of the year. Shares in the oil and gas giant are 29.6% better off than at the end of last year.

The post Why is the Santos share price off to a cracking start to the week? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• These were the best performing ASX 200 shares last week
• 3 ASX 200 energy shares smashing multi-year highs on Friday
• 2 more of this broker’s best ASX share ideas for June
• Own Santos shares? Here’s the company’s response to the energy crisis

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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Zip Co Ltd (ASX: ZIP) share price has plummeted to its lowest point since 2018 this morning, hitting an intraday low of 74.5 cents.

That marks a 5.7% tumble on Friday’s close. Its new multiyear low also represents a near 95% fall on the buy now, pay later (BNPL) share’s all-time high of $14.53, reached in February 2021.

At the time of writing, the Zip share price has ever-so-slightly recovered. The stock is currently swapping hands for 75.5 cents a piece, 4.4% less than it was at its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is also down 0.4% on Monday.

Let’s take a closer look at what’s dragged the Zip share price to its lowest point of the last four years.

Zip share price plunges to 75 cents on Monday

The Zip share price is being bludgeoned on Monday, as is the S&P/ASX 200 Information Technology Index (ASX: XIJ).

While Zip technically doesn’t call the tech sector home — it’s housed on the S&P/ASX 200 Financials Index (ASX: XFJ) — it tends to trade in line with its technology-focused peers.

The tech sector is currently down 1.84% following a tough Friday session on Wall Street.

The tech-heavy Nasdaq Composite plunged 2.47% on Friday, while the S&P 500 slipped 1.63% and the Dow Jones Industrial Average fell 1.05%.

Block Inc (ASX: SQ2) – home of BNPL giant Afterpay – is among the tech sector’s biggest weights today. Its share price is currently down 4.1%.

Meanwhile, shares in payments provider Tyro Payments Ltd (ASX: TYR) have slumped 4.2%.

And today’s struggles have only added to the tech sector’s recent woes. It’s tumbled nearly 34% since the start of 2022 amid rising inflation and resulting interest rate hikes.

At the same time, the financials sector is outperforming the ASX 200. It has fallen nearly 2.4% in 2022 while the ASX 200 has slumped 5.2%.

At today’s intraday low, the Zip share price was down approximately 83% year to date. It was also 89% lower than it was this time last year.

The post Zip share price dips to yet another 4-year low on Monday appeared first on The Motley Fool Australia.

More reading

• The carnage continues: Why the Zip share price has hit 7 multi-year lows in a month
• Why Nanosonics, REA, Sayona Mining, and Zip shares are dropping
• Why is the Zip share price sinking yet again on Thursday?
• Is this a ‘fundamental flaw’ with ASX BNPL shares like Zip
• Why Allkem, Origin, PointsBet, and Zip shares are sinking today

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 positions in and has recommended Block, Inc., Tyro Payments, and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended Tyro Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Woodside Energy Group Ltd (ASX: WDS) shares or Whitehaven Coal Ltd (ASX: WHC) shares, which is the best value opportunity?

We’ll get to that in a tick.

First, a spot of recent history.

Both of the S&P/ASX 200 Index (ASX: XJO) energy companies have been making hay over the past 18 months, as energy prices have rocketed from their post pandemic lows.

Here’s what we mean.

In October 2020, Brent crude oil was trading right around US$40 per barrel. As the world began to reopen over the following months, growing demand met with sticky supply following years of shortcomings in new exploration and project development.

Add in energy-rich Russia’s invasion of Ukraine, and today that same barrel of Brent crude is trading for just over US$121, while coal prices are fetching near all-time highs.

How have Whitehaven and Woodside shares performed?

Since 2 October 2020, the ASX 200 has gained a very healthy 25%.

In line with rocketing energy prices, the S&P/ASX 200 Energy Index (ASX: XEJ) has almost tripled that return, up 73%.

Woodside shares have outpaced the energy index benchmark, gaining 89% over that same period. At the current price, Woodside shares pay a 5.9% trailing dividend yield, fully franked. The energy giant now has market cap of $60.4 billion following its recent successful merger with the oil and gas assets of BHP Group Ltd (ASX: BHP).

The Whitehaven share price has stormed ahead even faster, up a whopping 415% since 2 October 2020. At the current price, Whitehaven has a market cap of $5.5 billion and pays a 1.5% trailing dividend yield, unfranked.

Following that strong run, which is the best value opportunity?

Getting back to our headline question, after a tremendous 18 months, do Woodside shares or Whitehaven shares present the better value play?

For some insight into that question, we defer to Philipp Hofflin, portfolio manager at Lazard Asset Management.

Hofflin saw that opportunity in the beaten down ASX energy shares in October 2020 and began adding them to Lazard’s holdings.

Speaking to Livewire, Hofflin explained, “What attracted us to the sector 18 months ago was a combination of the very low prices and the fact that there was just no CAPEX around the world in energy.”

Modern renewables “are only at 6% of global supply, and they aren’t able to fill the hole that is left by the much larger declines on the fossil fuel side at the moment,” he said.

The natural depletion rate for oil and gas is around 5% to 7%. “So, if you don’t invest, then you don’t have replacement projects for the ones that run off and your supply actually starts to fall.”

With that thesis in mind, Hofflin was comfortable buying Whitehaven and Woodside shares 18 months ago when many investors wouldn’t touch them.

The case for Whitehaven Coal

Explaining why Whitehaven Coal still remains an attractive play, although Lazard has sold off a large part of its holdings, Hofflin said:

In the case of Whitehaven, the current ex-Newcastle high CV thermal coal price is over $400 US. At those sorts of prices, Whitehaven has a free cash flow that is about equivalent to its market cap, over 12 months. So, free cash flow is at a level of 100%.

Looking ahead, however, he cautions, “At the same time, we know that these extraordinary prices are not going to last… The risk-return profile for something like Whitehaven isn’t as good as it was” 18 months ago.

“On one hand, we have the fact that commodity prices will fall, and on the other hand, there will be enormous cash flows.”

Woodside shares come out on top with fortress balance sheet

For the best value play Woodside shares come out on top.

“The numbers aren’t perhaps quite as dramatic,” Hofflin said. “But Woodside too is on a 33% spot free cash flow yield today.”

Hofflin continued:

The astonishing thing about Woodside is that you can buy it today at 20% less than it was pre-COVID. Yet it has done a deal with BHP Petroleum, that is currently delivering phenomenal earnings. The Asian gas price is off at $30 for a million British thermal units – it’s an extraordinary price. The cash flow is enormous. They have a fortress balance sheet because they did this deal entirely with equity.

Comparing Woodside shares today with Whitehaven’s, Hofflin said, “Whitehaven is a risky stock… On the other hand, Woodside, which has a sort of breakeven cost of production of just a bit over $10 a barrel, in a world where the oil price is $110, it’s a pretty safe value opportunity.”

Happy investing!

The post Woodside shares or Whitehaven? What’s the best ASX 200 value play? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• 3 ASX 200 energy shares smashing multi-year highs on Friday
• Woodside share price edges lower following NYSE debut
• 5 things to watch on the ASX 200 on Friday
• Why Bubs, IGO, Strike Energy, and Woodside shares are pushing higher

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 Scott Phillips.

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The National Australia Bank Ltd (ASX: NAB) share price is lower on Monday following an announcement from the banking giant.

At the time of writing, NAB shares are down 1% to $30.97.

In comparison, the S&P/ASX 200 Index (ASX: XJO) is also down 0.44% to 7,207 points.

What did NAB update the ASX with?

According to its announcement, NAB has launched its capital notes 6 offer to syndicate brokers and institutional investors. A capital note is a way for banks to raise money from investors.

The company has allocated around $1 billion, with an expected margin in the range of 3.15% to 3.35% per annum. However, the total amount to be raised will depend on the amount and value of applications received.

The face value is set at $100 per capital note 6, with a minimum investment of $5,000.

Furthermore, the distribution rate [(bank bill rate + margin) x (tax rate)] will be calculated on a quarterly basis.

Unless exchanged earlier, the notes will convert into a variable number of NAB ordinary shares on 17 September 2032.

The capital notes 6 are being issued as part of NAB’s ongoing funding and capital management strategy. Proceeds are expected to be allocated towards general corporate and funding purposes.

The closing date for the capital 6 notes is on 30 June 2022. Settlement is due to take place on 7 July with the notes trading the following day.

About the NAB share price

Over the last 12 months, NAB shares have gained 12% despite short-term volatility swings on the ASX.

The company’s share price is up more than 7% year-to-date.

When looking at valuation terms, NAB commands a market capitalisation of roughly $100 billion with 3.2 billion shares on issue.

The post NAB share price backtracks amid $1 billion capital raise appeared first on The Motley Fool Australia.

More reading

• What’s the outlook for the NAB share price in June?
• 2 top ASX dividend shares to buy according to analysts
• What’s dragging on ASX 200 bank shares like NAB on Thursday?
• Why did the NAB share price go backwards in May?
• ASX 200 midday update: NAB completes acquisition, lithium miners sink, Origin tumbles

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 Scott Phillips.

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The Block Inc (ASX: SQ2) share price has started the week deep in the red.

In morning trade, the payments giant’s shares are down 5.5% to $113.21.

Why is the Block share price tumbling?

The main catalyst for the weakness in the Block share price today has been a poor night of trade for its NYSE listed shares on Friday.

Given how Block’s Australian shares are inextricably tied to its NYSE shares and move in tow with them, a poor night on Wall Street will almost always lead to an equally poor day on the ASX boards.

So, with the US tech sector and Block taking a tumble on Friday night after the bear market rally ran out of steam, today’s decline was inevitable.

Not helping matters is news that the payments giant’s shares will soon be kicked out of the exclusive ASX 50 index.

On Friday, S&P Dow Jones Indices announced that Block would be removed on 20 June when the index rebalances. It will be replaced in the ASX 50 club by mining and mining services company Mineral Resources Limited (ASX: MIN) from that date.

Where next for the company’s shares?

While the market may not be too enamoured with the Block share price right now, one leading broker sees plenty of upside.

A recent note out of Macquarie reveals that its analysts have an outperform rating and $180.00 price target on the company’s shares.

Though, as mentioned above, whether the Block share price reaches that level will depend entirely on where its NYSE listed shares go over the next 12 months.

Shareholders will no doubt be hoping that investors on Wall Street become as bullish as those at Macquarie in the near future.

The post Why is the Block share price tanking 5% on Monday? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• 3 ASX 200 shares swimming in billions, besides banks and miners
• Why are ASX 200 tech shares having such a cracking Friday?
• Why is the Block share price tumbling 4% on Thursday?
• Here are the top 10 ASX shares 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 positions in and has recommended Block, Inc. The Motley Fool Australia has positions in and has recommended Block, Inc. 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 Scott Phillips.

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The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has fallen almost 10% since the end of April 2022.

ANZ shares started falling since the release of the FY22 first half result on May 4.

In that report, the company revealed that statutory net profit after tax (NPAT) rose by 10% to $3.53 billion.

However, profit before credit impairments and tax fell 7% to $4.16 billion. Profit before credit impairments, tax and notable items dropped 10%. In other words, the underlying performance of the business went backwards.

But, could things be about to turn around for the business?

Broker ratings on the ANZ share price

ANZ is rated as a buy by the broker Citi, with a price target of $30.75. That implies a possible 20% rise over the next year for the ANZ share price.

One of the reasons for the positivity is that a higher proportion of mortgages are variable loans, which should help the net interest margin (NIM).

On Citi’s numbers, the ANZ share price is valued at 12 times FY22’s estimated earnings and 11 times FY23’s estimated earnings.

Ord Minnett is another broker which rates it as a buy. The price target is $28.30, which implies a possible rise of 13%.

While the brokers have given price targets for the next 12-months, it’s impossible to know where a share price will go over the next week or month, let alone a year. Analysts are just giving a rating and a guess of where the ANZ share price will be sitting.

ANZ dividend yield

Some investors may be tempted by the dividend yield on offer from ANZ. It can play an important part in the total returns of the business. The franking credits may also be a welcome bonus for some investors focused on income.

But how large is the dividend going to be in the coming periods?

Citi has a dividend estimate which, at the current ANZ share price, equates to a grossed-up dividend yield of 8.4% in FY22 and 9.7% in FY23.

Ord Minnett also has a dividend estimate for ANZ. The FY22 grossed-up dividend yield is expected to be 8% and the FY23 grossed-up dividend yield is expected to be 8.7%.

ANZ share price snapshot

Since the beginning of 2022, the ANZ share price has fallen by just over 10%. It’s also down 13% over the past year and 9.7% over the last five years.

The post What’s the outlook for the ANZ share price in June? appeared first on The Motley Fool Australia.

More reading

• Experts name the ASX 200 dividend shares to buy with big fully franked yields
• What’s dragging on ASX 200 bank shares like NAB on Thursday?
• May wasn’t kind to the ANZ share price. Here’s what happened
• ANZ share price largely unfazed by ASIC law suit
• The corporate cop is suing ANZ: share price on watch

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 Scott Phillips.

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You may be curious as to why the WAM Capital Limited (ASX: WAM) share price is heading south today.

During early morning trade, the investment company’s shares are down 4.79% to $1.99.

Shareholders lock in the WAM interim dividend

While the S&P/ASX 200 Index (ASX: XJO) is also treading lower today, the WAM share price is trading ex-dividend.

This follows the release of the company’s half-year result in February, reporting growth across key financial metrics.

Despite registering a robust scorecard, the board opted to maintain its upcoming interim dividend over the prior corresponding period.

Typically, one business day before the record date, the ex-dividend date, is when investors must have purchased shares. If the investor buys WAM shares after this date, the dividend will go to the seller.

When can shareholders expect to be paid?

For those eligible for WAM’s interim dividend, shareholders will receive a payment of 7.75 cents per share on 17 June. The dividend is fully franked at a corporate tax rate of 30%, which means investors will receive tax credits.

In addition, investors can elect for the dividend reinvestment plan (DRP) which will add a portion of shares to their portfolio instead, based on a 10-day volume-weighted average price.

There is a 2.5% DRP discount rate and the last election date for shareholders to opt in is 9 June.

WAM share price summary

Since the beginning of 2022, WAM shares have lost 10% on the back of weakened investor sentiment.

For context, the ASX 200 benchmark index is down around 3% over the same timeframe.

It’s worth noting that the company’s shares reached a 52-week low of $1.98 today.

Based on today’s price, WAM commands a market capitalisation of roughly $2.26 billion and has a trailing dividend yield of 7.67%.

The post Why is the WAM Capital share price sliding today? appeared first on The Motley Fool Australia.

More reading

• Hoping to secure the next WAM Capital dividend? Read this
• Is AFIC the best LIC on the ASX?
• 2 compelling All Ordinaries ASX shares this fund manager likes
• WAM Capital’s ASX founder has been buying shares. Here’s what we know

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 Scott Phillips.

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The Magellan Financial Group Ltd (ASX: MFG) share price is being pummelled by another round of bad news on Monday.

This morning, the company announced its funds under management (FUM) continued to fall in May. Meanwhile, the market’s also likely reacting to news Magellan has been dumped from the S&P/ASX 100 Index (ASX: XTO).

At the time of writing, the Magellan share price is $13.51. That’s 9.51% lower than Friday’s close and 36% lower than it was at the start of 2022.

Let’s take a closer look at what’s hammering the Magellan share price on Monday.

Magellan share price tumbles alongside FUM

The Magellan share price is taking yet another hit after the company announced its FUM tumbled 5.2% in May.

As of the end of last month, the funds management business was overseeing $65 billion. That’s $3.8 billion less than it was charged with at the end of April.

The company’s retail FUM fell 4.8% to $23.6 billion in May while its institutional FUM fell 5.4% to $41.4 billion.  

The global equities segment was the biggest weight on the company’s FUM – slipping $2.8 billion to $35.2 billion.

Meanwhile, Australian equities slumped around $800 million to $9.1 billion and infrastructure equities stayed flat at $20.7 billion.

Additionally, Magellan will soon be dumped from the ASX 100 in news that dropped after Friday’s market close.

The company’s removal comes after The Lottery Corporation Ltd (ASX: TLC) was spun out from Tabcorp Holdings Limited (ASX: TAH).

That likely means funds tracking the index will be forced to banish Magellan from their holdings from 20 June.

Its removal from one of the ASX’s most prestigious indexes follows a period of poor performance and drama at the company.

Magellan’s FUM have also been sliding for some time now.

The company was rocked by news St James’s Place – which previously accounted for around 12% of the company’s revenue – had abandoned its contract with Magellan in December.

Finally, Magellan co-founder and former chair and chief investment officer Hamish Douglass stepped down from the board following a period of scrutiny in March.

The post Why is the Magellan share price tumbling 10% on Monday? appeared first on The Motley Fool Australia.

More reading

• What to do with these 3 pummelled ASX shares: advisor
• Can the Magellan share price stage a comeback in June?
• Free cash flow: Here are 3 ASX All Ords shares that have it in spades
• What’s going on with the Challenger share price today?
• Why is the Magellan share price marching higher today?

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 Scott Phillips.

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It has been a tough year for the Lifestyle Communities Limited (ASX: LIC) share price.

Since the start of 2022, this retirement communities company’s shares have lost a third of their value.

Is the weakness in the Lifestyle Communities share price a buying opportunity?

One leading broker appears to see the weakness in the Lifestyle Communities share price as a major buying opportunity.

According to a recent note out of Goldman Sachs, its analysts have a conviction buy rating and $24.65 price target on the company’s shares.

Based on the current Lifestyle Communities share price of $13.87, this implies potential upside of almost 80% for investors over the next 12 months.

Why is Goldman so bullish?

There are four key reasons why Goldman Sachs is bullish on Lifestyle Communities. These include structural drivers, the pace of its land acquisitions, first home buyer support, and the overall valuation of the Lifestyle Communities share price.

In respect to structural drivers, Goldman explained:

Continued ability to deliver supply against structural growth in demand for land lease: LIC is well-placed to provide supply to a growing cohort of over 50’s with limited savings outside the family home seeking to free up equity. In the near term, we see potential modest house price declines offset by LIC’s favourable pipeline and inventory position, coupled with a strong value proposition for incoming home owners, with the cost of an LIC home reaching <70% of the median house price in some areas (vs. ~c.80% typically), thus providing pricing support.

As for its valuation, the broker highlights the following:

[D]espite a rising rate environment (our GS Macro team forecasts peak-to-trough house price declines of 10% and a year-end policy rate of 2.60%) we continue to see valuation support for lower or maintained cap rates across the Australian land-lease sector, and would expect to see spreads decline.

LIC generates low-risk, annuity rental income. RLLCs (Residential Land Lease Communities) are becoming an institutional-grade property sub-sector, with increasing demand, particularly from offshore institutions/pension funds/corporates. At a business level, LIC trades on 25x FY23 P/AFFO vs. the median of peers at 23x, yet it offers a +32% 3-year AFFO CAGR (FY21-FY24E) vs. peers at only +11% CAGR.

The post Top broker tips Lifestyle Communities share price to rocket 80% higher appeared first on The Motley Fool Australia.

More reading

• These were the best performers on the ASX 200 last week
• Top brokers name 3 ASX shares to buy today
• Broker names 3 emerging ASX shares to buy now
• 3 ASX All Ordinaries shares having a stellar run on Wednesday
• Why CSL, Dicker Data, Lifestyle Communities, and Money3 shares are rising 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 Scott Phillips.

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The PlaySide Studios Ltd (ASX: PLY) share price is in the spotlight this morning amid its latest announcement.

Shares in the Australian game developer are sparkling a little brighter today, leaping 11.11% shortly after open on Monday.

They have since retreated — at the time of writing, PlaySide Studios shares are up 6.94% at 77 cents. Shareholders are receiving the much-needed boost following the company’s work-for-hire extension with social media and virtual reality juggernaut Meta Platforms Inc (NASDAQ: FB).

What does it mean for the ASX-listed company?

More work with Meta is on the horizon

Investors are doing a double-take of PlaySide Studios today as it deepens its relationship with a US$500 billion tech giant.

An extended work-for-hire development agreement will see the Aussie game developer get another 16 months with the company formerly known as Facebook. The agreement likely quells any concerns that PlaySide had seen the last of Meta after signing a six-month extension more than eight months ago.

The previous work involved conceptualisation, creation, and development of prototype works for Meta’s Horizon Worlds. For those wondering, Horizon Worlds is a virtual world that is readily accessible using Meta’s Quest VR headsets.

PlaySide CEO Gerry Sakkas commented on the announcement:

Significantly extending and expanding our agreement with Meta further builds on our relationship with this global brand and leader in innovation and validates PlaySide’s ability to meet and exceed Meta’s expectations as well as generating significant additional opportunities and revenue for PlaySide.

In addition to the 16-month extension, PlaySide has also landed a separate six-month contract with Meta. According to the announcement, this agreement will see the Aussie developer work on a new VR initiative for Meta. The project has a fast turnaround, set for delivery in October 2022.

PlaySide Studios share price recap

It has been a difficult year so far for PlaySide shareholders. The small-cap company’s share price has been steadily chipped away, now 40% lower. However, we can see a more positive picture when zoomed out. One that shows the PlaySide Studios share price up an impressive 167% in the past year.

Although, the market might be looking over PlaySide with a sceptical lens due to the composition of its third-quarter revenue. While the company achieved a record quarterly revenue of $13.76 million (up 403%), around half of that stemmed from a one-off sale of non-fungible tokens (NFTs).

The post PlaySide share price jumps 11% after scoring Meta extension appeared first on The Motley Fool Australia.

More reading

• Revenue up 400%: expert sticks by ASX share that’s halved this year

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Mitchell Lawler has positions in Meta Platforms, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Meta Platforms, Inc. The Motley Fool Australia has recommended Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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