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The mining sector is dragging on the market this morning – but that’s not the case for ASX lithium shares which are trading higher.

The underperformance of the sector is primarily due to the fall the big ASX mining shares, which are all exposed to iron ore.

The Fortescue Metals Group Limited (ASX: FMG) share price dropped 2% to $23.91, the BHP Group Ltd (ASX: BHP) share price shed 1.6% to $52.85 and the Rio Tinto Limited (ASX: RIO) share price surrendered 1.2% to $131.62 at the time of writing.

Our largest miners were the main drags on the S&P/ASX 200 Index (Index:^AXJO) as it dipped 0.2%.

ASX lithium shares bucking the downtrend

However, the smaller ASX lithium shares are bucking the trend. The Galaxy Resources Limited (ASX: GXY) share price rallied 3.2% to $4.84 and Pilbara Minerals Ltd (ASX: PLS) share price added 2.1% to $1.95.

This rotation has been playing out in recent days and could continue for a little while yet.

This is because the outlook for both commodities have started to diverge – and quite rapidly.

Iron ore could fall deeper into bear market

The price of iron ore has fallen into a bear market and Morgan Stanley believes the steel making mineral has passed its peak.

“The iron ore price is falling, down to $181/t from a high of $222/t in early July, pulled down by rapidly slowing Chinese demand,” said the broker.

“We see further downside price pressure, as we expect the incremental market tightness that pushed iron ore through the $200/t barrier during 1H to fully unwind in 2H21.”

Morgan Stanley is forecasting the average price for the ore will tumble to US$160 a tonne by the 2021 December quarter. More worryingly, it warned that even that estimate may prove to be too optimistic.

Brighter outlook for ASX lithium shares

Meanwhile, the outlook for lithium continues to power up. Macquarie Group Ltd (ASX: MQG) noted that spodumene spot prices have surged to over US$1000 a tonne.

“Global passenger electric vehicle sales rose 153% YoY in June to 540k vehicles and 161% YoY in the first half to 2.4m vehicles,” said the broker.

“Macquarie’s Commodities Strategy Team believed that full-year 2021 sales should be well above 5mt and upgraded their forecast from 4.8m to 5.3m vehicles.

“An expected end-year surge in sales in Europe and China could take the final figure even higher.”

ASX shares to buy

In this context, Rio Tinto Limited’s (ASX: RIO) move to expand aggressively into lithium looked well timed. But it will be 2026 before its Jadar project will hit first production.

Macquarie’s top buys in the sector are the Mineral Resources Limited (ASX: MIN) share price, IGO Ltd (ASX: IGO) share price and Pilbara Minerals share price.

The post Why ASX lithium shares are beating the iron ore majors – again appeared first on The Motley Fool Australia.

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• This leading broker believes Fortescue Metals (ASX:FMG) shares can lift
• ASX 200 shares to shift earnings growth up a gear in FY22 – Expert
• Own BHP (ASX:BHP) shares? Here’s what to look for during reporting season
• Own Fortescue (ASX:FMG) shares? Here’s what to look for during reporting season

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, Fortescue Metals Group Limited, Galaxy Resources Limited, Macquarie Group Limited, and Rio Tinto Ltd. 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 Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Afterpay Ltd (ASX: APT) share price has continued to rally higher following its $39 billion takeover proposal from Square Inc (NYSE: SQ) on Monday.

At the time of writing, shares in the leading buy now pay later giant have added another 12.23% to $128.86 and up an astonishing 33.5% this week.

Get used to the Square and Afterpay share price moving together

The Square and Afterpay share prices are now intrinsically linked together following the takeover proposal.

The terms of the takeover is an all-scrip offer, where Afterpay shareholders will receive a fixed exchange ratio of 0.375 Square shares for each Afterpay share they own on the record date.

While the exchange ratio is fixed, the Square share price is the variable that could continue to move Afterpay, moving forward.

Square jumps 10% overnight

Square shares rallied strongly overnight in response to its Afterpay takeover proposal.

The Square share price rallied as much as 13.60% intraday to a near all-time high of US$280.88.

By market close, the company’s shares closed 10.16% higher to US$272.38.

The rally also witnessed significant volumes, with approximately 45.73 million shares changing hands, compared to Square’s 10-day average of approximately 10.74 million.

At a closing price of US$272.38, this would imply that one Afterpay share is worth US$102 or A$138.49.

Signs of life in the BNPL sector

The surging Afterpay share price appears to be bringing life back into the BNPL sector, with gains across the board.

Overnight, the Affirm Holdings Inc (NASDAQ: AFRM) share price rallied 14.90% to US$63.71.

While the likes of Zip Co Ltd (ASX: Z1P) and Sezzle Inc (ASX: SZL) have rallied 15.21% and 5.13% in the last two days.

Even smaller, beaten up BNPL players such as Openpay Group Ltd (ASX: OPY), Laybuy Holdings Ltd (ASX: LBY) and Splitit Ltd (ASX: SPT) have jumped 8.42%, 15.12% and 10.87% respectively.

The post Up another 12%, why the Afterpay (ASX:APT) share price keeps pushing higher appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Afterpay jumps again, Qantas stands down crew
• Afterpay share price surges on takeover. Oil Search, Santos do a deal. Scott Phillips on Nine’s Late News
• Here are 4 sure-fire ways to catch the next 10-bagger
• Square up 10%. What does this mean for the Afterpay (ASX:APT) share price?
• Why the Afterpay (ASX:APT) share price can still rise (and fall) after the Square deal

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 AFTERPAY T FPO, Affirm Holdings, Inc., Square, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It has been a cracking past year for the NIB Holdings Limited (ASX: NHF) share price, climbing nearly 60%. Yet, one fund manager still considers the health insurer an attractive proposition.

At the time of writing, the company’s shares are down 0.7% to $7.13. Furthermore, the NIB share price is ~2% off its recently reset 52-week high of $7.30.

Could the NIB share price run higher?

Earlier this morning, I covered a few key takeaways from the Prime Value Opportunities Fund June update. In contrast, the team also operates an ‘Emerging Opportunities’ fund which focuses on ASX-listed companies outside the ASX 100.

Impressively, the Emerging Opportunities fund delivered a 42% return after fees in FY21. This represents an 8.8% outperformance of the S&P/ASX Small Ordinaries Index (ASX: XSO).

The fund openly dismissed speculation of a near-term market downturn. Rather, Prime Value reiterated its high-conviction stock-picking approach – noting that short-term weakness would present opportunities.

Speaking of opportunities, the fund highlighted the NIB share price as ‘very attractive’ on a two-to-three-year time horizon.

In its update, the Melbourne-based Australian investment manager said:

The consensus view is that profit margins are unsustainably high and it’s better to own the health providers as elective surgeries, etc. return. We agree NHF’s margins will fall but using long term, sustainable margins, the company is very attractively priced. And in the meantime it generates very high cashflows, boosting the balance sheet. To us, fundamental underlying value is more important than short term earnings trends.

Based on the current NIB share price, the company trades on a price-to-earnings (P/E) ratio of 32.9. For dividend investors, NIB health offers a 1.96% dividend yield.

Funds’ top holdings

Portfolio Manager Richard Ivers has put a heavy emphasis on financials, consumer discretionary, and industrials for the Emerging Opportunities fund.

However, the top five holdings include City Chic Collective Ltd (ASX: CCX), EQT Holdings Ltd (ASX: EQT), Mainfreight Limited (NZE: MFT), News Corp (ASX: NWS), and Uniti Group Ltd (ASX: UWL).

The post NIB Holdings (ASX:NHF) share price looks attractive long term – Expert appeared first on The Motley Fool Australia.

More reading

• NIB Holdings (ASX:NHF) share price hits 52-week high as chairman retires
• NIB Holdings (ASX:NHF) share price hits new 52-week high today

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 recommended NIB Holdings Limited and Uniti 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

Wild fluctuations in the share price of fintech company Affirm Holdings (NASDAQ:AFRM) continue. After skyrocketing in value following its IPO in January, Affirm has been trending downwards, and a widespread tech growth-stock sell-off in the spring didn’t help. Shares were down 16.4% during the month of July, valuing the buy-now, pay-later company at a market cap of just over $17 billion at the end of the month.

So what

Affirm had started to make up some ground in June after it announced a partnership with e-commerce software giant Shopify (NYSE:SHOP). Specifically, Affirm will be powering the Shop Pay Installments service, giving potentially many tens of thousands of merchants the ability to offer flexible payment terms to consumers and capitalizing on the fast-growing, buy-now, pay-later (BNPL) movement.

But Affirm isn’t alone in this nascent industry. PayPal Holdings (NASDAQ:PYPL) has a similar product, and fellow BNPL upstarts Klarna and Afterpay are also making waves. Though it’s growing fast, Affirm still operates at a loss, so it’s no surprise shares took another leg down in July in volatile trading action.

However, the stock came roaring back on the first trading day of August after Square (NYSE:SQ) announced on Aug. 1 it’s acquiring Affirm’s peer Afterpay (OTC:AFTP.F) for $29 billion. Affirm nearly made up all the ground it lost in July following Square’s announcement.

Now what

Speculation is swirling that Affirm could become an acquisition target as well. Digital payment and financial service technologists are quickly adding new capabilities to their suite of services to attract new users, and Affirm’s torrid pace of growth (83% year-over-year increase in gross merchandise volume to $2.3 billion, in the first quarter of 2021) would be a valuable asset to the right firm.

For now, though, Affirm is still independent and finding lots of new partnerships to unlock its full potential. Whether it becomes a takeover target, this is a top name in fintech to keep an eye on. Affirm will announce results on Sept. 9, in the fourth quarter of fiscal 2021.

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

The post Why shares of Affirm Holdings were down over 16% in July appeared first on The Motley Fool Australia.

More reading

• Here’s why Affirm Holdings was up big on Monday
• Why the Afterpay (ASX:APT) share price is in the green today
• Afterpay (ASX:APT) share price is higher despite the sharp ASX 200 selloff
• As markets fall, big business fights back against disruptive growth stocks
• Why the Afterpay (ASX:APT) share price is crashing 9% on Wednesday

Nicholas Rossolillo and his clients own shares of PayPal Holdings, Shopify, and Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Affirm Holdings, Inc., PayPal Holdings, Shopify, and Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings, long January 2023 $1,140 calls on Shopify, and short January 2023 $1,160 calls on Shopify. The Motley Fool Australia has recommended PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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The Good Drinks Australia Ltd (ASX: GDA) share price is up after the company released its unaudited annual results.

The company reported earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $10.7 million and $51.6 million of revenue.

Right now, the Good Drinks Australia share price is 8.9 cents, 3.53% higher than its previous closing price.

Additionally, more than 2.9 million Good Drinks Australia shares have swapped hands today. For comparison, the average number of Good Drinks Australia shares swapping hands per month is 288,399.  

Let’s take a closer look at the unaudited results for the 2021 financial year from Australia’s largest independent drinks manufacture.

The financial year just been

The Good Drinks Australia share price is gaining after the company released its results from a successful financial year.

Good Drinks Australia is the company behind beer, cider, and beverage brands Coopers, Stone & Wood, Burleigh Brewing, Young Henry’s, Matso’s, Single Fin, and others.

Over the financial year just been, Good Drinks Australia’s EBITDA increased by a whopping 1,683% compared to that of the previous financial year. Its revenue also increased by 40% when compared to the prior period, while its gross profit improved 69%.

The volume of the company’s own-brand drinks sold increased by 45%. It sold 17.1 million litres of consumable liquids, 11.4 million litres – including more than 1 million cartons – of which were bottled by its own brands.

Its Single Fin brand also surpassed a milestone 1 million cartons sold during the period. Single Fin is Western Australia’s most popular craft beer.

The company reported a 30% growth rate in distributions on Australia’s eastern coast.

Its total production volume for the 12 months ended 30 June was 19.8 million litres – 53% more than its production during the 2020 financial year.

The company’s Atomic Beer Project Redfern venue recorded an EBITDA loss of $500,000 due to COVID-19 restrictions implemented during its first year of operations.

The company is also building a venue for its Gage Roads brand. The build’s expected to cost $10 million. It will be funded through a $12.5 million debt facility.  

Good Drinks Australia share price snapshot

The Good Drinks Australia share price has been performing well on the ASX lately. It has gained 10% year to date. It is also 76% higher than it was this time last year.

The company has a market capitalisation of around $108 million, with approximately 1.2 billion shares outstanding.

The post Here’s why the Good Drinks Australia (ASX:GDA) share price is gaining appeared first on The Motley Fool Australia.

More reading

• Why the Comet Ridge (ASX:COI) share price is rocketing up 22% today
• Mayne Pharma (ASX:MYX) share price drops on class action
• Santos (ASX:STO) share price wobbling on news of Mahalo project
• ASX 200 midday update: Afterpay jumps again, Qantas stands down crew
• Facebook is on a collision course with Shopify

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 Comet Ridge Ltd. (ASX: COI) share price is rocketing, up 22% in afternoon trade.

Below, we take a look at the ASX resource explorer’s acquisition announcement.

What acquisition announcement did Comet report?

The Comet Ridge share price is soaring after the company reported it has entered into binding agreements to acquire Australia Pacific LNG’s (APLNG) 30% interest in the Mahalo Gas Project.

Once the deal is complete, Comet Ridge’s 40% interest in Mahalo will increase to 70%.

The company also reported it has executed a funding and option agreement with its joint venture (JV) partner on the project, Santos Ltd (ASX: STO).

Located in Queensland, the Mahalo Gas Project “encompasses the ‘Shallows’ strata from surface down to the base of the Lower Mantuan Coal”. According to the release, interest in the “Deeps” will remain unchanged, with Santos and APLNG each holding 50%. Mahalo Deeps was last drilled in 1991.

On completion of the acquisition Comet Ridge will pay APLNG a cash consideration of $12 million, with an additional $8 million post-completion payment in deferred tranches.

Santos has provided the company with access to $13.15 million of debt funding, covering the cost of the upfront acquisition as well as $1.15 million in stamp duty costs.

In exchange for the loan funding, Santos has several rights to acquire interests in the project. That includes the right to acquire a 12.86% interest in from Comet Ridge at a proportional acquisition value, within 6 months of completion.

Commenting on the transactions, Comet Ridge’s managing director, Tor McCaul said:

These transactions are transformational for Comet Ridge. Built on compelling acquisition metrics, they establish a streamlined joint venture with Santos to not only progress development plans for the Mahalo Gas Project, but the whole Mahalo Gas Hub area.

The terms we have been able to agree with APLNG and Santos unlocks the potential of the entire Mahalo Gas Hub area to become a significant supplier of gas to the east coast market where industry dynamics have strengthened considerably as we continue to see a tightening of gas supply.

The Comet Ridge share price could also be getting a lift from a separate announcement released this morning. In that release, Comet reported it has entered into a binding agreement with PURE Asset Management to access a term loan facility for up to $10 million.

Comet Ridge’s chief financial officer, Phil Hicks said, “The Pure facility complements the funding arrangements that Comet Ridge has put in place with its joint venture partner, Santos Ltd, to support the company’s Mahalo Gas Hub project development strategy.”

Comet Ridge share price snapshot

Comet Ridge’s share price is up 57% over the past 12 months. By comparison the All Ordinaries Index (ASX: XAO) is up 28% over that same time.

Year-to-date the Comet Ridge share price is also up 57%.

The post Why the Comet Ridge (ASX:COI) share price is rocketing up 22% today appeared first on The Motley Fool Australia.

More reading

• Santos (ASX:STO) share price wobbling on news of Mahalo project
• Afterpay share price surges on takeover. Oil Search, Santos do a deal. Scott Phillips on Nine’s Late News
• ASX 200 rises, Afterpay soars, Zip jumps
• Why the Oil Search (ASX:OSH) share price is roaring 5% higher today
• ASX 200 midday update: Afterpay to be acquired by Square, Oil Search to merge with Santos

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 Mayne Pharma Group Ltd (ASX: MYX) share price is struggling to catch a bid in today’s session.

Shares in the pharmaceutical company are struggling after the company announced it is facing a class action.

Here’s what the company announced and why investors are exercising caution over the Mayne share price.  

Mayne share price dips on proceeding of class action

Earlier today, Mayne announced that the company has been slapped with an investor class action.

According to the announcement, legal proceedings have been lodged in the Supreme Court of Victoria.

Mayne noted the class action alleged the company undertook misleading or deceptive conduct. In addition, the action alleges the company was in breach of continuous disclosure obligations over alleged anti-competitive conduct in the United States.

Australian law firm Phi Finney McDonald brought the legal proceedings. The law firm is acting on behalf of all investors who acquired shares in Mayne between 24 November 2014 and 15 December 2016.

In the company’s announcement, Mayne emphatically denies any and all allegations of wrongdoing. Accordingly, the company noted it will vigorously defend the proceedings.

More on the class action against Mayne

According to the website of Phi Finney McDonald, it is alleged Mayne participated in a conspiracy to restrain trade, inflate the price of generic pharmaceuticals, and reduce competition.

The class action against Mayne follows an announcement on 15 December 2016. On that day, the Attorney General of Connecticut commenced anti-trust civil proceedings against a number of pharmaceutical companies, including Mayne Pharma Inc (US).

There are 3 main allegations against Mayne Pharma. In particular, it’s alleged the company agreed to price-fixing and market-sharing arrangements from late 2014.

Snapshot of the Mayne share price

Mayne Pharma is a specialty pharmaceutical company focused on commercialising novel and generic pharmaceuticals. The company also provides contract development and manufacturing services to clients. Mayne Pharma has two facilities based in Salisbury, Australia and Greenville, USA.  

Despite soaring to a 52-week-high in mid-April, the Mayne Pharma share price has struggled in 2021. Including today’s price action, shares in the pharmaceutical company are down more than 7% year-to-date.

At the time of writing, the Mayne share price is trading 6% lower for the day at 31.5 cents.

The post Mayne Pharma (ASX:MYX) share price drops on class action appeared first on The Motley Fool Australia.

More reading

• Why the Comet Ridge (ASX:COI) share price is rocketing up 22% today
• Santos (ASX:STO) share price wobbling on news of Mahalo project
• ASX 200 midday update: Afterpay jumps again, Qantas stands down crew
• Facebook is on a collision course with Shopify
• Humm (ASX:HUM) share price rises after partnership announced

Motley Fool contributor Nikhil Gangaram 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 Santos Ltd (ASX: STO) share price is currently in the red after an update was released about the Mahalo gas project.

Santos’ joint venture partner Comet Ridge Ltd (ASX: COI) announced it has increased its ownership of the project and Santos will likely be able to do the same.

The Mahalo gas project is located near Gladstone in Queensland. The companies hope it will supply gas to the east coast of Australia in the future.

Right now, the Santos share price is $6.45, 0.62% lower than its previous close. At one point it was down as much as 0.93%, but also edged into the green during morning trade.

Let’s take a closer look at today’s news from Santos.

Santos might up its Mahalo holding

The Santos share price is slipping despite news it will be providing a loan to Comet Ridge in exchange for the option to increase its hold in the Mahalo project to 42.86% pro rata.

Comet Ridge will use a $13.5 million loan from Santos to acquire Australia Pacific LNG Pty Ltd’s 30% share of the project, increasing its stake to 70%.

Santos will then have the option to negotiate with Comet Ridge to increase its stake up to a holding of 50%.

It will also be able to negotiate to acquire 50% of Comet Ridge’s Mahalo North and Mahalo East assets.

The companies plan for Comet to drive it to a final investment decision, after which Santos will take over as the project’s development operator.

The Mahalo project encompasses the shallow portion of the project. The deep portion of the area is owned in equal parts by Santos and Australia Pacific LNG.

The project’s development has been slowed by COVID-19 and the price of oil declining during the pandemic.

Commentary from management

Santos’ managing director and CEO Kevin Gallagher commented on the news that could be driving the Santos share price today. He said:

Santos is keen to continue to develop our Queensland resources and this transaction provides another option for additional gas reserves. We look forward to working collaboratively with Comet Ridge to assess the potential of the Mahalo gas project.

Santos share price snapshot

The Santos share price is in the green by the skin of its teeth.

Right now, it’s about 2% higher than it was at the start of the year. Fortunately, it’s gained about 21% since this time last year.

The post Santos (ASX:STO) share price wobbling on news of Mahalo project appeared first on The Motley Fool Australia.

More reading

• Afterpay share price surges on takeover. Oil Search, Santos do a deal. Scott Phillips on Nine’s Late News
• ASX 200 rises, Afterpay soars, Zip jumps
• Why the Oil Search (ASX:OSH) share price is roaring 5% higher today
• ASX 200 midday update: Afterpay to be acquired by Square, Oil Search to merge with Santos
• Santos (ASX:STO) share price rises on revised merger proposal

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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At lunch on Tuesday, the S&P/ASX 200 Index (ASX: XJO) has run out of steam and is trading lower. The benchmark index is currently down 0.3% to 7,470.4 points.

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

Afterpay share price jumps

The Afterpay Ltd (ASX: APT) share price is jumping again on Tuesday. This follows a positive response on Wall Street to Square’s acquisition of the company. This led to the Square share price jumping 10% overnight. And given that the acquisition is an all-scrip deal, any rises in the Square share price will be great news for Afterpay shareholders. Square has offered 0.375 shares per Afterpay share. This equates to approximately $138.78 per share today following last night’s rise.

Qantas stands down crew

The Qantas Airways Ltd (ASX: QAN) share price is trading lower today after the airline operator announced that it would be standing down 2,500 crew for two months. Qantas is making the move after recent lockdowns and border closures led to expectations of an extended period of reduced flying.

Credit Corp lower following FY 2021 results

The Credit Corp Group Limited (ASX: CCP) share price is under pressure today following the release of its full year results. The debt receivables company reported an 11% increase in net profit after tax to $88.1 million in FY 2021. While this was in line with its guidance range of $85 million to $90 million, investors may be a touch concerned with its outlook for FY 2022. It is forecasting a 3.5% decline to 7.8% increase in net profit.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Tuesday has been the Afterpay share price with a 12% gain. This follows a rise in the Square share price overnight. The worst performer on the ASX 200 has been the Pointsbet Holdings Ltd (ASX: PBH) share price with a 12% decline. The catalyst for this was the completion of its institutional entitlement offer and placement.

The post ASX 200 midday update: Afterpay jumps again, Qantas stands down crew appeared first on The Motley Fool Australia.

More reading

• Qantas (ASX:QAN) share price slips as airline stands down 2,500 crew
• Afterpay share price surges on takeover. Oil Search, Santos do a deal. Scott Phillips on Nine’s Late News
• Why the PointsBet (ASX:PBH) share price is crashing 12% lower on Tuesday
• Credit Corp (ASX:CCP) share price charges 6% higher after strong FY 2021 result
• Here are 4 sure-fire ways to catch the next 10-bagger

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Pointsbet Holdings Ltd. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Pointsbet Holdings 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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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.

Facebook‘s (NASDAQ: FB) core business has always been advertising. The company sells highly targeted ads alongside user-generated content to its audience of nearly half of the world. It’s a great business model and one that just brought in more than $12 billion in operating income in its second quarter.

Now, Facebook is thinking beyond ads. Apple’s (NASDAQ: AAPL) app-tracking transparency initiative has made tracking more difficult for Facebook and its advertisers, adding incentives for the company to expand beyond ads.

CEO Mark Zuckerberg spent much of his time on the recent earnings call talking about the company’s push with creators, commerce, and the next computing platform, which he dubbed the metaverse. Of those three growth areas, commerce is the most logical extension for Facebook’s business.

It already has relationships with more than 7 million small and medium-sized businesses (SMBs), not to mention the world’s biggest brands. Many of those SMBs see Facebook as a crucial component of their businesses for things like customer acquisition or even as a full-on digital storefront.

Historically, SMBs used Facebook to attract customers, who then click out of Facebook’s ecosystem to go to the brand’s own website. For e-commerce companies, those sites are often run by Shopify Inc (NYSE: SHOP). Since Facebook is the primary acquisition tool for many of these businesses and has a wealth of data from users and ad clicks, it makes sense for the company to capture all of the value of those transactions, up to the payments themselves, rather than just the ad spend.

Commerce isn’t new for Facebook. The social media giant had previously launched “Shops” on Facebook and Instagram, but it seems to sense opportunity in e-commerce in a way that it hadn’t before.

Opportunity knocks

Annual e-commerce sales are on the verge of topping $1 trillion in the U.S. Globally, that number is significantly higher. For a company the size of Facebook, online commerce is one of the few businesses that’s big enough to really move the needle.

Zuckerberg explained his thinking on commerce simply on the call, saying, “Our approach is to work our way down the stack and build world class services at every layer of commerce — starting from discovery at the top of the stack all the way down to payments.”

In other words, Facebook wants to keep the entire shopping experience on its platform, avoiding the need for users to bounce off its platform onto a brand website or a Shopify store. Zuckerberg noted that clicking on an ad link that takes users off a Facebook site often means having to reenter your payment information, leading to a bad user experience.

Facebook now has 1.2 million stores on Facebook and Instagram Shops. By comparison, Shopify finished last year with 1.75 million merchants using its software. Facebook isn’t far behind the leading e-commerce platform.

What it means for Shopify

Shopify provides software to run e-commerce businesses, and after Amazon Inc (NASDAQ: AMZN), the company has been the biggest winner in online retail. But Apple’s crackdown on ad targeting could be a problem for Shopify because it directly impacts the small businesses the company depends on.

The move is also incentivising Facebook, which is probably Shopify’s largest source of traffic, to invest in its own commerce platform, ultimately moving transactions from Shopify to Facebook. As Facebook improves Shops, it could peel away some of Shopify’s business, especially if it offers SMBs a lower customer-acquisition cost.

For now, Shopify investors don’t seem to have much to worry about. The company put up blistering growth during the pandemic, and in the second quarter, posted 57% revenue growth to $1.12 billion. It’s also solidly profitable. Its outlook called for continued strong growth, though at a more normalised pace than last year.

Zuckerberg acknowledged the commerce initiative would be a long-term one, so it’ll likely take years before Facebook becomes a major player in e-commerce. The Facebook chief said: “This is a long-term strategy and it’s going to take a while before it’s meaningful — especially given the scale of our ads business already — but I’m confident that it’s the right long-term bet and product direction.”

The e-commerce pie is growing and could be big enough to satisfy both Facebook and Shopify, but Facebook’s efforts to keep sales in its ecosystem will have an effect on Shopify. Investors in the latter company should keep an eye on what’s happening with Facebook Shops, especially in relation to Apple’s ad-targeting crackdown. The more Apple squeezes Facebook, the more Facebook is likely to squeeze Shopify, as a result.

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

The post Facebook is on a collision course with Shopify appeared first on The Motley Fool Australia.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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. Jeremy Bowman owns shares of Amazon and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Amazon, Apple, Facebook, and Shopify. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon, long January 2023 $1,140 calls on Shopify, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, short January 2023 $1,160 calls on Shopify, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Amazon, Apple, and Facebook. 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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