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The Pilbara Minerals Ltd (ASX: PLS) share price touched an all-time high on Tuesday morning. This comes after the lithium miner provided investors with an announcement about its senior debt facilities.

Earlier today, Pilbara Minerals shares hit a new high of $2.55. Currently, they are up 1.41% to $2.51 apiece. In the past month alone, its shares have risen by more than 20%.

What did Pilbara Minerals update the ASX with?

Investors appear pleased with the company’s latest news, sending the Pilbara Minerals share price higher today.

In its release, Pilbara Minerals advised it has reached an agreement with its existing lenders to increase its senior debt facilities.

This will see the company expand its finance facility to US$130 million, and its undrawn working capital facility to US$25 million. The total secured debt facility limit increased by US$30 million to US$155 million.

Most of the additional funds will go towards a staged restart of the Ngungaju plant at Pilbara’s operations in Western Australia.

Once fully recommissioned, the plant will have a spodumene production capacity of 180,000 to 200,000 dry metric tonnes by mid-2022.

The company is aiming for the Ngungaju plant to produce 580,000 dry metric tonnes per annum when at full capacity.

The term of the working capital facility has been extended to November 2023. The maturity of the finance facility remains unchanged at 30 June 2025.

Commenting on the news possibly pushing up the Pilbara Minerals share price today, managing director Ken Brinsden said:

We are pleased to have expanded our existing facilities with our supportive lending group with the increase of US$30M sufficient to underpin the restart of the Ngungaju plant in a cost-effective manner.

The increased facility limit is another demonstration of the strength of our business, the quality of our asset, and follows an extraordinary year of growth and transformation for Pilbara Minerals.

Pilbara Minerals share price snapshot

Over the past 12 months, the Pilbara Minerals share price has accelerated by almost 300%. It’s also up by 190% year to date. However, it wasn’t until late July the company’s shares began taking off to record highs.

At its current share price, Pilbara Minerals commands a market capitalisation of roughly $7.37 billion.

The post Here’s why the Pilbara Minerals (ASX:PLS) share price hit a record high today 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. 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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S&P/ASX 200 Index (ASX: XJO) travel shares are putting in a mixed performance today.

Webjet Ltd (ASX: WEB) has dipped into the red, currently down 0.35% to $5.67 per share.

The Qantas Airways Ltd (ASX: QAN) share price, meanwhile, is lifting. Qantas shares are up 0.29% to $5.275 per share.

This comes as the S&P/ASX 200 Index (ASX: XJO) is holding onto its own gain of 0.65%.

That’s today’s price action.

But with Australia looking to reopen domestic and international travel, what’s the outlook for ASX 200 travel shares for 2022?

For some expert insight into that question we turn to Paul Xiradis, head of equities at Ausbil Investment Management.

Another year of strong earnings growth

According to Xiradis, “The outlook for FY22, particularly from late calendar 2021, is for another year of strong earnings growth from select cyclicals…”

Xiradis noted this is particularly true for companies exposed to services, including ASX 200 travel shares:

We are of the view that forward estimates for the next two years will be upgraded, driven by an under-appreciated pick-up in activity beyond COVID lockdowns.

The December quarter ’21 is shaping up to be a very strong period, making up for the lockdown-induced slowing in the September quarter. We expect activity levels will remain elevated for the whole of calendar year ’22, before it starts its march to trend growth commencing in ’23.

We do not believe Australian equities are too expensive on average when you consider them in relative terms against where long-term interest rates are sitting, and their forward earnings growth outlook.

Drilling into the forward earnings per share (EPS) growth, Xiradis said, “We believe… some of the post-lockdown beneficiaries are offering strong potential EPS growth for FY22 relative to value.”

ASX 200 travel shares have certainly come to the fore as post-lockdown beneficiaries. Both the Qantas and Webjet share prices rocketed following the announcement of effective vaccines in November 2020. And shares again lifted off when Australia’s reopening plans were clarified amid high vaccination rates in August this year.

Yet, as Xiradis points out, there are risks to their continuing recovery. Notably, surrounding the unknowns of the virus:

Any resurgent re-infection issues or return to lockdowns and border closures would be a concern, however with vaccination rates so high we believe this risk of such is low. Furthermore, the breakthrough of a COVID-19 antiviral pill by Pfizer could be a game changer. There remains a slim risk that not all Australian states will deliver on vaccination targets, but we believe this risk is negligible.

Regarding the ASX 200 travels shares named above, Xiradis said, “Post-lockdown, with borders reopening we see positive earning growth outlooks for companies like Qantas [and] Webjet…”

How have these ASX 200 travel shares been performing?

The Qantas share price is up 8% so far in 2021 while fellow ASX 200 travel share Webjet has gained 11%. That compares to a 12% year-to-date gain posted by the ASX 200 itself.

Over the past month, Qantas shares have lost 7% and the Webjet share price is down 10%.

The post Is the reopening already priced into ASX 200 travel shares? appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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At lunch on Tuesday, the S&P/ASX 200 Index (ASX: XJO) is on course to record a solid gain. The benchmark index is currently up 0.65% to 7,400.6 points.

Here’s what happening on the ASX 200 today:

TechnologyOne results

The TechnologyOne Ltd (ASX: TNE) share price is falling following the release of its full year results. For the 12 months ended 30 September, the enterprise software company delivered a 43% increase in SaaS ARR to $192.3 million and a 19% lift in profit before tax to $97.8 million. The latter was at the top end of its guidance range. More growth is expected in FY 2022.

Bapcor shares fall on CEO news

The Bapcor Ltd (ASX: BAP) share price is sinking today after announcing the exit of its Chief Executive Officer and Managing Director, Darryl Abotomey. Mr Abotomey is stepping down after a decade leading the company on 28 February 2022. A global search for a replacement has commenced. However, if a permanent CEO has not been appointed by 28 February, Bapcor’s Non-Executive Director, Mark Powell, will assume the role of Acting CEO.

BHP and Woodside merger update

BHP Group Ltd (ASX: BHP) and Woodside Petroleum Limited (ASX: WPL) shares are storming higher today after signing a binding share sale agreement (SSA) for the merger of BHP’s oil and gas portfolio with Woodside. This will see Woodside acquire the entire share capital of BHP Petroleum in exchange for new Woodside shares.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Tuesday has been the Fortescue Metals Group Limited (ASX: FMG) share price with a 7% gain on no news. The worst performer has been the Bapcor share price with an 8% decline following its CEO retirement. 

The post ASX 200 (ASX:XJO) midday update: BHP, Woodside rise, TechnologyOne falls 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. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Bapcor. 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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There are some ASX shares that have been rated as buys by multiple analysts.

This level of popularity could suggest that there’s an opportunity for investors to take advantage of.

Brokers are always on the lookout for compelling ideas at a good price. It’s possible that all of these analysts are wrong at the same time.

Having said that, here are two popular, buy-rated ASX shares at the moment:

Northern Star Resources Ltd (ASX: NST)

Northern Star Resources is one of the biggest gold miners on the ASX. With the Northern Star share price at $9.74 at the time of writing, it has a market capitalisation of $11.7 billion according to the ASX.

It’s currently rated as a buy by at least four brokers, including Macquarie Group Ltd (ASX: MQG). Macquarie has a price target on Northern Star of $13, which implies a potential upside of around 30% over the next year.

The broker believes that betters results at its Pogo project might help the miner. The ASX share said that in the three months to September 2021, Pogo saw 43,992 ounces of gold sold at an all-in sustaining cost of US$1,751 per ounce.

In that quarterly update, Northern Star Resources said overall gold sold totalled 386,160 ounces at an all-in sustaining cost (AISC) of A$1,594 per ounce. The average realised price was A$2,345 per ounce for the quarter, helping the business generate cash earnings of between A$165 million to A$175 million.

The company thinks it’s on track to meet FY22 guidance of between 1.55 million ounces to 1.65 million ounces at an AISC of between A$1,475 per ounce to A$1,575 per ounce.

Northern Star Resources also announced it is buying Newmont’s power business, Newmont Australia, for US$95 million, which owns half of the Parkeston Power Station. This gives the business greater control over its power supply in Kalgoorlie.

Reliance Worldwide Corporation Ltd (ASX: RWC)

Reliance Worldwide is a business that aims to provide high performance, time-saving solutions for plumbing and heading systems with its brands SharkBite, Speedfit and Holdrite.

It’s currently rated as a buy by at least five brokers, including Ord Minnett which has a price target of $7.40 on the business.

The broker notes that Reliance Worldwide is achieving growth, though certain COVID-19 pandemic effects are impacting the supply chain.

In the three months to 30 September 2021, it said that it experienced year on year sales growth in all three of its operating regions (Americas, Asia Pacific and EMEA) with reported net sales up 8% to $246 million, whilst operating earnings increased 5%.

Reliance Worldwide is seeing strong underlying demand in all three regions as people invest in their homes, spending on repairs and remodelling.

The company referenced issues relating to shipping and freight delays, materials shortages, and delays elsewhere in the construction sector. This has been particularly true in the UK where there’s a shortage of transport drivers.

The ASX share is expecting demand to remain positive. These supply chain problems could prolong the current demand levels. However, the supply chain issues will likely be the strongest in the second quarter, which is the current quarter, and then lessen in the third quarter of FY22 as the business passes on price increases.

Reliance Worldwide is also acquired EZ-FLO International for US$325 million. It’s a manufacturer and US distributor of plumbing supplies and specialty plumbing products. This will expand the company’s offering and accelerate its growth in the North American market.

According to Ord Minnett, the Reliance Worldwide share price is valued at 21x FY22’s estimated earnings.

The post 2 ASX shares rated as buys by multiple brokers 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 Reliance Worldwide Corporation Limited. The Motley Fool Australia has recommended Macquarie Group Limited and Reliance Worldwide Corporation 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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Investors who might have been hoping to buy (or sell) Pinnacle Investment Management Group Ltd (ASX: PNI) shares today would have received a bit of a rude shock this morning. Investors were treated to a notice informing the markets that Pinnacle shares would be placed in a trading halt “pending a further announcement”. So the Pinnacle share price will be staying at $17.50 until tomorrow when trading resumes.

Well, we didn’t have to wait too long to find out exactly what this announcement was.

Less than an hour later, Pinnacle released another announcement.

Pinnacle share price halted to acquire 25% of Five V Capital

The company announced it intends to acquire a 25% stake in Five V Capital. It will do this via a $105 million institutional share placement.

This represents around 3.3% of the existing shares on issue. Additionally, existing shareholders will be able to apply for up to $30,000 in new shares via a share purchase plan.

The new shares will be issued at a price of $16.70 per share, which the company was quick to point out represents a 4.6% discount to yesterday’s closing share price.

So of the $105 million that will be raised from this placement, $75 million has been earmarked for the FIve V acquisition. The remaining $30 million will be used to “replenish the balance sheet capacity that was used to fund the acquisition of the 25% stake in Coolabah in 2019”.

The offer will close on 15 December, with the new shares scheduled to commence trading on 23 December.

The company will come out of its trading halt later this week, when all eyes will be on the Pinnacle share price.

Five V is a venture capital and private equity company, representing Pinnacle’s first exposure to these spaces. It focuses on “ANZ businesses with an enterprise value of A$20 million–A$200 million”.

Pinnacle has told investors the deal will deliver “attractive returns for Pinnacle shareholders” in the following ways:

• Strategic investment that is expected to deliver attractive returns for Pinnacle shareholders;
• Consistent with strategy of increasing exposure to private capital markets, including private equity;
• High-quality investment team with a proven track record of delivering investment excellence;
• Provides leverage to Affiliate with attractive economics; expected to be broadly neutral to EPS pre performance fees; and
• Demonstrates flexibility of Pinnacle’s model and ability to partner with fund managers across all asset classes.

An FUM update and more…

In addition to this capital raising, Pinnacle also gave investors a company update this morning.

Pinnacle announced that its aggregate funds under management (FUM) stood at $90.9 billion as of 31 October. That was up $1.5 billion (or 1.7%) from the $89.4 billion the company recorded on 30 June.

Pinnacle also told investors it is expecting “strong momentum” going into FY2022. This was based on the fact its current FUM is more than 30% ahead of FY21’s average.

At the current Pinnacle share price, this company has a market capitalisation of $3.38 billion, with a dividend yield of 1.64%.

The post Why is the Pinnacle (ASX:PNI) share price frozen today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended PINNACLE FPO. The Motley Fool Australia owns shares of and has recommended PINNACLE 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 Sovereign Cloud Holdings Ltd (ASX: SOV) share price is still frozen today as the company undergoes a $35 million capital raise.

The capital raise includes a placement to NextDC Ltd (ASX: NXT) that will see it walking away with a 19.99% holding in Sovereign Cloud and a new partnership between the two companies.

The Sovereign Cloud share price has been halted at 61 cents since before the market opened on Monday.

Let’s take a closer look at the latest news from the infrastructure-as-a-service provider servicing Australian governments and critical industries.

Sovereign Cloud’s capital raise

As part of the company’s $35 million capital raise, it will offer around 70 million shares for 50 cents piece.

That represents an 18% discount to its current share price. The soon-to-be-issued shares also represent around 70% of the company’s existing shares.

NextDC’s 19.99% stake will cost it approximately $12.4 million. The other $22.6 million will come from an institutional and a retail entitlement offer.

Under the entitlement offers, Sovereign Cloud shareholders will be able to purchase 4 new shares in the company for every 11 shares they already hold.

All eyes will be on the Sovereign Cloud share price tomorrow when the company is expected to exit its trading halt following the institutional entitlement offer.

What’s next for Sovereign Cloud?

Following the capital raise, Sovereign Cloud’s platform AUCloud will have a cash position of $41.5 million.

The funds will go towards investing in customer growth, scaling AUCloud, and the research and development of new features.

The platform will also be rolled out to Brisbane, Melbourne, and Adelaide, on top of its presence in Sydney and Canberra.

Additionally, NextDC will be appointing a new director to Sovereign Cloud’s board. That will initially see NextDC’s CEO and managing director Craig Scroggie at the table.

Finally, the partnership between NextDC and Sovereign Cloud will give the latter’s platform access to NextDC’s national network of more than 1,500 customers and 730 channel partners.

The two companies will also expand AUCloud into the enterprise market.

Sovereign Cloud share price snapshot

It has been a tough year so far for the Sovereign Cloud share price.

It has fallen 41% since the year began. Its also 3% lower than it was this time last month.

The post Here’s why the Sovereign Cloud (ASX:SOV) share price is in the spotlight this week 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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The 4DMedical Ltd (ASX: 4DX) share price is shooting higher today following the rollout of the company’s respiratory imaging platform.

At the time of writing, 4DMedical shares are swapping hands for $1.43, up 19.17%.

4DMedical makes strides on XV LVAS

In today’s statement, 4DMedical advised it has partnered with I-MED Radiology Network (I-MED) for the commercial rollout of its XV Lung Ventilation Analysis Software (XV LVAS).

I-MED is Australia’s largest diagnostic imaging provider with more than 250 clinics across the country.

The first XV LVAS deployment will occur next month at the Berwick clinic in Melbourne after a successful pilot program. Clinicians and specialists based in and around the Casey region of Victoria, Australia, will soon be able to refer patients to I-MED’s state-of-the-art Berwick imaging clinic.

4DMedical’s proprietary XV LVAS technology converts X-ray images into a four-dimensional data package using mathematical models and algorithms. The platform then provides physicians with information about a patient’s lung motion and airflow. This enables the detection and monitoring of various lung diseases which can be managed or treated if possible.

The XV LVAS is expected to be further installed within hospitals and imaging centres, offering greater accessibility for all patients. This includes sites in Brisbane and Wagga Wagga in early 2022 and at selected locations across I-MED’s network thereafter.

In addition, all facilities with XV LVAS will be able to offer 4DMedical’s lung report for both inpatient and outpatient care. This in turn is expected to maximise the number of addressable patients for the company, effectively increasing revenue streams.

4DMedical is making progress with its commercial pilots in the United States. The company currently has a near-term commercialisation pipeline, particularly within the large and important Veterans Health Administration (VHA) healthcare system.

The respiratory diagnosis industry is worth an estimated US$31 billion per annum worldwide. The United States, the world’s largest healthcare market, represents an annual opportunity of US$13.7 billion.

About the 4DMedical share price

Despite today’s gain, 4DMedical shares have disappointed investors, with the company’s share price losing 40% over the last 12 months. The company’s share price hit a 6-month low of $1.16 yesterday before rebounding higher.

4DMedical has a market capitalisation of roughly $292 million, with more than 208.95 million shares outstanding.

The post 4DMedical (ASX:4DX) share price launches 19% on first commercial scans 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. 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 Life360 Inc (ASX: 360) share price was halted from the open today. This comes after a company announcement on a strategic acquisition and equity raising.

The Life360 share price was $13.51 before the company requested a pause in trading on its shares.

Here are the details.

Strategic acquisition and equity raising

Life360 advised it has entered into a binding agreement to acquire 100% of the “cloud-based finding platform” Tile. The deal was settled for a total consideration of approximately $282.8 million. The purchase price includes US$35 million in retention awards for Tile employees.

Tile was founded in 2012 and is based in California. It is reported to be the “global leader in finding things and locates millions of unique items every day”.

Life360 notes that Tile offers a range of ‘Tile trackers’ that vary in size and can be attached to products such as electronics, backpacks, and keys – a key differentiator from competitors.

According to Life360, the combination of its family safety platform and Tile’s business model “creates an integrated market leader in location solutions for all life stages, enabling a seamless experience for families that integrates people, pets, and things”.

Life360 will pay the $282.8 million deal by way of cash and up to US$37.6 million of new Life360 shares issued to Tile shareholders.

The total consideration represents a CY21 revenue multiple of approximately 1.5x before any earn-out payment; or approximately 2.0x assuming the earn-out is paid in full and inclusive of the retention awards, per the release.

To finance the deal, Life360 will undertake a fully underwritten equity raising to institutional investors. In total, the entitlement offer and institutional placement will raise gross proceeds of around $280 million.

Investors can expect the transaction to settle in Q1 2021, according to the announcement.

Life360 also reiterated guidance of annualised monthly revenue by December 2021 in the range of US$125–130 million for its core business.

Management commentary

Speaking on the announcement, Life360 co-founder and CEO Chris Hulls said:

This is genuinely the most impactful deal in our company’s history, and along with our Jiobit acquisition from earlier this year, our vision of linking people, pets and things all in one place is now complete. As some backstory, I met the company’s co-founders, Nick Evans and Mike Farley, back in 2014. We connected immediately because it was clear to us that we would either be working together or be competitors at some point in the future, as we both had what I’ll call the religious belief that location would be part of everything. We had the platform of mobile phones covering people. They had the hardware device covering things.

Life360 share price snapshot

In the past 12 months, the Life360 share price has soared by more than 252%. It has also rallied 255% this year to date.

In the past month, it has climbed almost 43% and is up 3% in the last week. For comparison, the S&P/ASX 200 index (ASX: XJO) is up around 12% in the past year.

The post Life360 (ASX:360) share price halted amid $280 million acquisition 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. owns shares of and has recommended Life360, Inc. 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 world’s top crypto by market valuation, Bitcoin (CRYPTO: BTC), is falling hard. The digital token is down more than 4% over the past 24 hours to US$56,585 (AU$78,590).

That puts Bitcoin down more than 11% since this time last week, according to data from CoinMarketCap.

Ethereum (CRYPTO: ETH), the world’s number 2 crypto, isn’t faring much better. Ether is down 5% in 24 hours and 10% over the past week, currently trading for US$4,106.

Yet despite the current slide, both cryptos are still trading well above where they kicked off 2021. Bitcoin is up 95% year-to-date and Ethereum is up 458%.

But with continuing price volatility and a future outlook still hotly contested between crypto bulls and bears, “great caution” is in order for investors.

What did ASIC’s chair caution about crypto?

As reported by the Australian Financial Review, Australian Securities and Investments Commission (ASIC) chair Joe Longo said:

In my view consumers should approach investing in crypto with great caution. The maxim ‘don’t put all your eggs in one basket’ comes to mind.

Those here who are directly involved in the broader managed investments sector will understand the serious implications of investing without understanding. It is not an approach to be undertaken lightly.

Longo alluded to the Commonwealth Bank of Australia (ASX: CBA), which earlier this month became the first Aussie bank to launch a crypto service. That service enables its customers to buy, sell, and hold a range of digital tokens via the CommBank app.

According to Longo:

The fact Australia’s largest bank is already proposing a means of crypto-exposure for its retail customers is telling. Yes, it’s only a pilot project, but the overall direction is clear. This debate is no longer on the fringes of the financial services industry.

As we like to remind our readers at the Motley Fool, whether you’re looking at Bitcoin, altcoins or speculative shares, never invest more than you can afford to lose.

The post Why ASIC chair warns ‘great caution’ needed when investing in crypto appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in buy now pay later (BNPL) company Zip Co Ltd (ASX: Z1P) are inching lower in early trade and now change hands at $5.45.

Zip Co is back in the spotlight alongside its peers as the BNPL industry preps itself for the entry of tech heavyweights Apple Inc (NASDAQ: AAPL) and PayPal Holdings Inc (NASDAQ: PYPL) into the market next year.

This has market watchers peering closely at the sector’s next moves, especially with BNPL pioneer Afterpay Ltd (ASX: APT)’s US$29 billion merger with Square Inc (NYSE: SQ) due for settlement.

Zip is now trading at 3-month lows, having come down hard off its high of $7.12 on 20 October. It is now trading around 52-week lows and investors don’t appear interested.

Could Zip be a target at this share price?

That is the question bouncing around investor circles right now. And it seems there could be some activity behind the scenes already.

According to reporting from The Australian, BNPL providers Zip Co, Sezzle Inc (ASX: SZL), and Openpay Group Ltd (ASX: OPY) have been putting the feelers out testing buyer appetite ahead of Apple’s entry to the market.

The report also notes that Zip Co’s founder and managing director Larry Diamond was recently in the US for business talks to see how the company might scale there.

And with more than 7.3 million users and 50,000 retail partners, many would argue Zip certainly has the pillars to do so.

Any bigger fish wanting to offer a decent price to buy Zip Co would also gain direct exposure to this retail and customer base.

Aside from that, Zip hasn’t slowed its operations in 2021 despite its share price hitting the brakes. The company recently completed an acquisition of a Czech firm and also signed a partnership with Newegg to provide BNPL to its customers in Canada.

Brokers Ord Minnett and Morgans are both bullish on the direction of Zip’s share price, valuing Zip shares at $9.50 and $8.56 respectively in recent updates.

Most experts agree that Zip’s goal is to penetrate the US market with force. However, despite recent investments in rebranding and marketing, Citi reckons this hasn’t increased customer conversion.

The broker says Zip’s 4% increase in monthly downloads – which it uses to examine new customers – was fairly weak considering its spending efforts.

Nonetheless, it has a buy recommendation on the share and values Zip at $7.40/share in a recent note. If its share price keeps sliding, the gates might open up for a buyer of Zip Co but there’s nothing concrete out there at the moment.

Yet, with Zip’s potential expansion into the US market, The Australian notes that a merger with the $1 billion BNPL player Sezzle would be an alternative to listing on the American exchanges.

Zip Co share price snapshot

In the past 12 months, the Zip Co share price has fallen 12%. However, it has stayed in the green this year to date, gaining almost 4% since January 1.

Despite this, it has fallen 21% in the past month and has tanked another 8% in the past week of trading.

The post Does the lower Zip Co (ASX:Z1P) share price make it a takeover target? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Why Magnis, Nanosonics, WiseTech, and Zip shares are dropping
• Here’s what top brokers are saying about the Zip (ASX:Z1P) share price forecast
• Why are Zip (ASX:Z1P) shares being shorted in November?
• These are the 10 most shorted ASX shares

The Motley Fool writer Zach Bristow has no holdings 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, Square, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Apple. 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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