Tag: Motley Fool

The De Grey Mining Limited (ASX: DEG) share price has stormed higher in early afternoon trade on the back of positive news about a major new gold find at one of its sites.

At the time of writing, the De Grey share price is fetching $1.29, up 17% compared to the All Ordinaries Index (ASX: XAO), which is up 1.5% to 6,238 points.

What did De Grey report?

Earlier today, De Grey updated the market with the finding of new major gold deposits from drilling of its Aquila site at the Hemi gold discovery, located 60 km south of Port Hedland in Western Australia.

The company reported a new altered intrusion of 1.8 km long and up to 80 metres thick, logged in wide-spaced aircore drilling. Whilst De Grey continues to further drill over the 1.5 km space, the initial aircore results included:

• 21m @ 3.4 grams per tonne (g/t Au) from 40m and 19m @ 2.1g/t Au from 68m in BXAC501 (ends in mineralisation)
• 12m @ 2.0g/t Au from 93m in BXAC502 (ends in mineralisation)
• 21m @ 1.1g/t Au from 102m in BXAC506
• 29m @ 1.3g/t Au from 56m in BXAC546 (using a 0.3g/t lower cutoff)

Furthermore, the follow-up RC and diamond drilling showed consistent gold mineralisation with intense brecciation and alteration. Additional results included:

• 58m @ 2.1g/t Au from 64m in HERC232 (section 7691640N)-visible gold reported 5 August 2020
• 11m @ 1.2g/t Au from 199m in HERC231 (section 7691640N)
• 24m @ 0.8g/t Au from 167m in HERC233D (section 7691720N)-ended in mineralisation
• 31m @ 1.3g/t Au from 88m in HERC234 (section 7691800N)

De Grey advised that gold mineralisation has remained open beyond the current 1.8 km strike and is at depth.

What did management have to say?

Commenting on the positive findings, De Grey managing director Glenn Jardine said:

The discovery of the Falcon intrusion demonstrates the potential to significantly grow the gold endowment at Hemi as we expand our drilling footprint.

Reinterpretation of the overall geology shows the Aquila intrusion strikes for 1.2km in a southwest orientation and the new Falcon intrusion strikes for over 1.8km in a distinctly north-south orientation. Aircore drilling is continuing to track the Falcon intrusion to the south.

Jardine confirmed that the company has two aircore rigs in operation and is actively pursuing opportunities to extend the Hemi site and to identify “similar large scale, near surface Hemi-like intrusions in the Greater Hemi area”.

About the De Grey share price

The De Grey share price has stormed an astonishing 2,015% since the start of the calendar year. Although the gold mining company had a small hiccup between the end of June and middle of July, dropping 40%, it has since recovered reaching an all-time high today of $1.30.

De Grey is now valued at a market capitalisation of $1.51 billion.

Should you invest?

I think that a little bit of gold exposure is good for every portfolio. Personally, I would opt for established gold mining companies like Newcrest Mining Limited (ASX: NCM) or Northern Star Resources Limited (ASX: NST), so would only suggest allocating an extremely small portion of your investment funds to smaller exploration companies like De Grey.

As promising as the results look, and the traction the metal mining outfit has gained, it still remains a risky play. I will be adding De Grey shares to my watchlist for now.

More reading

• Why Brainchip, De Grey Mining, Nufarm, & Pointsbet shares are storming higher
• Gentrack share price higher on announcement of new CEO
• The Mosaic Brands share price surges 21% on lease deal
• Optimists 1, Pessimists 0
• ASX 200 Weekly Wrap: Earnings drag ASX back to reality

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post De Grey share price rockets 17% higher on new gold find appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3gRyRuG

The Sezzle Inc (ASX: SZL) share price has come under pressure again on Wednesday.

At one stage today the buy now pay later provider’s shares were down as much as 15.5% to $7.40.

When they hit that level, it meant the Sezzle share price had lost a sizeable 37% of its value since peaking at $11.83 on Friday.

Why has the Sezzle share price been sold off?

A combination of profit taking and concerns about increasing competition in the buy now pay later market have been behind the Sezzle share price sell off.

In respect to the latter, overnight on Monday, payments giant Paypal announced its intention to enter the market with its Pay in 4 product.

Pay in 4 is a short-term payment solution that will allow consumers to make a purchase and pay over four interest-free instalments. Just like Afterpay Ltd (ASX: APT) and Sezzle offer.

Given the size of PayPal, US$245 billion at present, its entry into the market could pose a threat for some of the smaller players such as Sezzle and the US-based QuadPay business owned by Zip Co Ltd (ASX: Z1P).

At present Afterpay has 5.6 million active customers in the United States and appears well-positioned to take on PayPal. Whereas Sezzle and QuadPay have a more modest 1.5 million and 2 million active customers, respectively.

Should you be concerned?

It’s difficult to know at this stage what impact PayPal’s entry into the market will have.

I’m not overly concerned for Afterpay as I believe it has such a strong presence and brand, that the added competition won’t hinder its growth.

It is also worth remembering that the industry is still in its infancy in the United States, with only a small fraction of the US$5 trillion retail market going through buy now pay later providers.

This could mean there’s plenty of room for all these companies to grow successful businesses over the next decade.

More reading

• Why we’re on track for more record ASX share prices
• Why the Zip share price is plummeting 15% today
• ASX 200 jumps 1.6%: Afterpay tumbles, IOOF crashes, CBA pushes higher
• Why Afterpay, IOOF, Redbubble, & Zip shares are dropping lower
• PayPal scares investors in BNPL shares, time to sell?

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 ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Here’s why the Sezzle share price crashed 37% lower in just a few days appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2QICl8d

A look at share price performance on the ASX yesterday may have you wondering why the stars are still aligned for record ASX share prices.

We’ll get to that in a moment. But first a quick glance backwards.

Yesterday, the S&P/ASX 200 Index (ASX: XJO) tumbled 1.8%. That brought the index of the largest 200 listed ASX shares back to where it was a month ago, on August 3.

Buy now, pay later (BNPL) giant Afterpay Ltd (ASX: APT) counted among the biggest losers, down 8.4% yesterday. And in late morning trade today, the Afterpay share price is down another 1.5%.

Afterpay’s share price – and other ASX-listed BNPL shares like the Sezzle Inc (ASX: SZL), down 26% since Monday’s opening bell – are under pressure from PayPal. This comes after the payment giant announced it’s launching its own BNPL platform in the United States called Pay-in-4.

So much for moats…

Back to today, the ASX 200 is up 1.6% in late morning. It may well recoup all of its losses from yesterday, and more.

But here’s the thing.

These daily moves in the ASX are mostly just noise. It’s the longer-term trend that matters. And longer-term, the momentum is upwards. The average share price recovery of ASX shares since the March lows remains firmly in place, with the ASX 200 up 33% since March 23.

Marching to new record ASX share prices

From today’s levels, the ASX 200 needs to gain roughly 19% to exceed its February 20 highs.

In normal times, that’s a tall order. But these are anything but normal times.

With global governments and central banks in a co-ordinated effort to stave off the economic damage from COVID-19, there’s every reason to believe the ASX 200 could top 7,200 points by Christmas.

We’ll give a passing nod to the massive stimulus being pumped out in China, Japan, Europe and much of the rest of the world and focus in on the US and Australia.

Tailwinds in Australia

As you likely know, the Reserve Bank of Australia (RBA) had its monthly powwow yesterday, as it does on the first Tuesday of every month. As expected, the official cash rate will remain at its rock bottom 0.25% for the foreseeable future, a great tailwind for shares.

What was more than many expected was the huge increase in the RBA’s Term Funding Facility, which lends to banks at a 3-year fixed rate of 0.25%. That funding has now increased to $200 billion.

To date, the banks have drawn about $52 billion under the facility since March. This is money that will support households and business and, you guessed it, share prices.

RBA governor Philip Lowe also highlighted the bank’s resolve to do whatever it takes, for however long it takes, to get the Aussie economy back on track. Lowe said: “The board will maintain highly accommodative settings as long as is required and continues to consider how further monetary measures could support the recovery.”

Judging by the strong performance of the ASX today, investors certainly took note.

US share markets at new all-time highs … again

While the ASX 200 still has a hill to climb before hit new record highs, US markets are breaking records almost every day.

The strength of the underlying shares certainly deserves its own credit. But the rally is also being propelled by record stimulus.

US Republicans and Democrats are still debating the details of the next relief, but it promises to be huge. US Treasury Secretary Steven Mnuchin indicated the economy is in direct need of fiscal stimulus. The Republican package looks to be in the range of US$500 billion. The Democrats appear to be holding out for more.

In the meantime, Bloomberg reports that, “The Federal Reserve has snapped up $1 trillion of mortgage bonds since March, a record pace of purchasing … It now owns almost a third of bonds backed by home loans in the US”

This has effectively pushed mortgage rates down in the US, supporting the crucial economic component of consumer spending.

In yesterday’s trading (overnight Aussie time), the S&P 500 Index (INDEXSP: .INX) and Nasdaq Composite (INDEXNASDAQ: .IXIC) both closed in record territory again. The tech heavy Nasdaq is now up 31% in 2020, and up 74% from its March 23 low.

Another healthy diversification reminder

This offers another good reminder of why you should consider investing some of your share market funds outside of the ASX.

Don’t get me wrong, there are plenty of great shares on the ASX. And if you want exposure to the booming US tech shares, you can do so right here on the ASX with the Betashares Nasdaq 100 ETF (ASX: NDQ).

The exchange traded fund (ETF) comprises the 100 largest, non-financial businesses on the Nasdaq. Its top holdings include all the FAANG stocks and a raft of other big players.

The ETF’s share price is up 2.7% in intraday trading today. Year-to-date the share price is up 32%.

The Motley Fool’s own Scott Phillips cottoned on to the potential of this ASX-listed investment more than 3 years ago. He recommended it on 22 June 2017 to members of his Share Advisor service. Since then the share price is up more than 117%.

And Scott still maintains a buy rating on the ETF, believing technology shares have a lot more gains ahead.

More reading

• Here’s why the Sezzle share price crashed 37% lower in just a few days
• UBS picks the best and worst ASX stocks from the reporting season
• Why the Zip share price is plummeting 15% today
• ASX 200 jumps 1.6%: Afterpay tumbles, IOOF crashes, CBA pushes higher
• Why Afterpay, IOOF, Redbubble, & Zip shares are dropping lower

Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS and Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why we’re on track for more record ASX share prices appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3hTRrUm

In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is back on form and on course to record a strong gain. At the time of writing the benchmark index is up a sizeable 1.6% to 6,047.6 points.

Four shares that are climbing more than most today are listed below. Here’s why they are storming higher:

The Brainchip Holdings Ltd (ASX: BRN) share price has surged 25% higher to 38.7 cents. Investors have been buying the artificial intelligence technology company’s shares after it announced a collaboration with VORAGO Technologies. This collaboration is intended to support a Phase 1 NASA program for a neuromorphic processor that meets spaceflight requirements.

The De Grey Mining Limited (ASX: DEG) share price has jumped 16% to $1.28. The catalyst for this was the announcement of yet another major gold discovery by the mineral exploration company. Management commented: “The discovery of the Falcon intrusion demonstrates the potential to significantly grow the gold endowment at Hemi as we expand our drilling footprint.”

The Nufarm Limited (ASX: NUF) share price is up over 3.5% to $4.06. This morning the agricultural chemicals company announced its expectations for FY 2020. After accounting for non-cash impairments of $215 million for its European business, the company expects to report earnings before interest, tax, depreciation and amortisation (EBITDA) in the range of $290 million to $300 million in FY 2020. This appears to be better than the market was expecting from Nufarm.

The Pointsbet Holdings Ltd (ASX: PBH) share price has bounced back from a heavy decline and is up 4.5% to $13.79. This morning analysts at Ord Minnett downgraded the sports betting company’s shares from a buy rating to a hold rating. However, they lifted their price target by more than 100% to $13.60. It suspects its deal with NBC Universal could create material brand awareness in key markets.

More reading

• De Grey share price rockets 17% higher on new gold find
• Brainchip share price rockets 30% higher on NASA program collaboration
• Nufarm share price charges higher on FY 2020 guidance
• Leading brokers name 3 ASX shares to sell today
• The Pointsbet share price rocketed 118% in August and our in-house pro says it’s still a long-term buy

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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why Brainchip, De Grey Mining, Nufarm, & Pointsbet shares are storming higher appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/32NSnTJ

The Gentrack Group Limited (ASX: GTK) share price is pushing higher today, following the announcement of the appointment of new CEO Gary Miles.

At the time of writing, the Gentrack share price is trading at $1.47, up 1.03% compared with the All Ordinaries Index (ASX: XAO), which is up 1.51%.

What does Gentrack do?

Gentrack provides specialist software for energy utilities, water companies and airports, mainly in Australia and New Zealand. The company’s platform aims to develop, integrate and support billing and customer management solutions.

What did management say?

Commenting on the new appointment, Gentrack acting chair Fiona Oliver said:

The Board is delighted to welcome Gary to the Gentrack business. He brings a real focus on driving global growth and building a workplace that fosters innovation, diversity and collaboration. His combined software and services experience with cloud technologies will also help to accelerate our transition to SaaS and deliver more value to customers and shareholders. 

Incoming CEO Gary Miles added:

The utility industry is entering a new era where regulatory, technology and environmental forces are accelerating the digital transformation of the market. Gentrack has been successful in helping service providers in some of the world’s most dynamic markets and countries. I am excited to work with the Gentrack team to bring great, customer centric technologies to these and other service providers around the world.

Gary Miles’ resume includes extensive experience in technology innovation and cloud capabilities, most notably serving on the leadership team of Amdocs Limited (NASDAQ: DOX) as chief marketing officer. Amdocs is a provider of cloud business software and services in the communications industry.

Miles’ previous roles within the company included division president and CTO leading strategy development. This involved building the company’s product portfolio and sales organisation as well as overseeing its digital services, big data and mobile engagement segments.

Gary Miles is expected to assume the CEO position on 1 October.

How has the Gentrack share price performed?

The Gentrack share price has struggled over the past 12 months. The technology company is 73% lower from its 52-week high of $5.50. However, the Gentrack share price is up 89% since its March low of 77 cents.

Should you invest?

Whilst this is a positive announcement and could be the start of good things to come, I think that there are better opportunities on the market at present. I will be watching Gentrack from the sidelines instead.

More reading

• De Grey share price rockets 17% higher on new gold find
• The Mosaic Brands share price surges 21% on lease deal
• Optimists 1, Pessimists 0
• ASX 200 Weekly Wrap: Earnings drag ASX back to reality
• Why reporting season isn’t the bloodbath we expected

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Gentrack share price higher on announcement of new CEO appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2F0VTSk

Last month’s reporting season produced more winners than losers despite the COVID-19 market meltdown. UBS picks the best and the worst of the S&P/ASX 200 Index (Index:^AXJO) bunch.

The broker noted that the profit season was better than expected with several stocks showing surprising resilience to the economic fallout from COVID-19.

One sector that stood out for all the right reasons was consumer discretionary. Many listed players in this space have a decent web presence that appealed to stuck-at-home consumers.

Other sectors that performed well include consumer staples, building materials, gaming, general industrials and insurance, added UBS.

Biggest earnings cuts

Consensus estimates for FY21 earnings per share (EPS) were cut by 1.8% over reporting season. The biggest culprit was the industrials (excluding financials) stocks as the group suffered an 8.2% downgrade.

Financials also got a 2.6% haircut to the current financial year’s EPS forecast, although most of the cuts were already made before reporting season.

On the other hand, resource stocks enjoyed a 6.3% uplift to FY21 EPS due largely to good commodity prices and outlook.

Profits to rebound in FY21

But the worst of the earnings hit could be behind us even though tomorrow’s GDP reading will almost certainly confirm that we are in a deep recession.

“The market now expects 8.3% EPS growth in FY21, led by the Financials (+13.3%) and the Resources (+8.3%),” said UBS.

“The Industrials ex-Financials are now only seen delivering 2.3% EPS growth, down from 8.3% before reporting season.”

Cash surprise

But one of the biggest surprises from the reporting season isn’t earnings but cash flow. The broker noted that 20% of stocks under its coverage delivered stronger than expected cash flows.

This may be due to management teams running down inventories and hoarding cash due to the uncertain operating environment.

Biggest ASX winners from reporting season

ASX 200 stocks that are regarded as being the champs of the reporting season in UBS’ eyes include the Cleanaway Waste Management Ltd (ASX: CWY) share price, and the JB Hi-Fi Limited (ASX: JBH) share price.

Others in the winners’ circle are the Reliance Worldwide Corporation Ltd (ASX: RWC) share price, Suncorp Group Ltd (ASX: SUN) share price and Treasury Wine Estates Ltd (ASX: TWE) share price, although the latter was subsequently hit by the China-Australia trade spat.

On the flipside, the biggest sinners include the Bendigo and Adelaide Bank Ltd (ASX: BEN) share price, Origin Energy Ltd (ASX: ORG) share price, Telstra Corporation Ltd (ASX: TLS) share price, RESMED/IDR UNRESTR (ASX: RMD) share price and Vicinity Centres (ASX: VCX) share price.

More reading

• ASX 200 jumps 1.6%: Afterpay tumbles, IOOF crashes, CBA pushes higher
• Should you buy Telstra and these beaten down ASX shares?
• 5 things to watch on the ASX 200 on Wednesday
• A strange thing is happening with index funds…
• ASX 200 falls 1.8%, Afterpay drops 8%

Brendon Lau owns shares of Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Reliance Worldwide Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited and Treasury Wine Estates Limited. The Motley Fool Australia has recommended Reliance Worldwide Limited and ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post UBS picks the best and worst ASX stocks from the reporting season appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2EMNna0

The Digital Wine Ventures Ltd (ASX: DW8) share price surged more than 10% this morning after the company released a positive company update.  

What are the details?

In the update, Digital Wine said its WINEDEPOT business shipped a record number of cases in August, up 28% on the previous record in July. Digital Wine reported that WINEDEPOT had processed a total of 4,151 orders in August, shipping 8,488 cases for the month.

Despite the increase in customers, the August growth came from existing customers ramping up their order volumes, the company said.

In addition, Digital Wine said that WINEDEPOT had added another 17 brands to its portfolio and signed its first small distributor. This was Turallao Wine Distribution, which represents a number of additional wine brands.

How has the Digital Wine share price performed?

Digital Wine is an online beverage supplier that provides end-to-end supply chain solutions for wine producers, distributors, importers and retailers. The company’s WINEDEPOT business operates as a cloud-based software-as-a-service. The WINEDEPOT technology platform removes inefficiency’s in supply chains and empowers direct-to-market sales.

Earlier this week, Digital Wine released its financial report for FY20. The company’s report was highlighted by revenue of $566,141 for the full-year, a 139% increase on its performance in 2019. 

Digital Wine primarily generates its revenue through trading fees and subscription fees for its WINEDEPOT platform. For the same period, Digital Wine Ventures posted a full-year loss of $2 million. However, the company attributed the loss to costs involved with the launch of WINEDEPOT and closure of operations in China.

At the time of writing, the Digital Wine share price has been sold down and is trading more than 5.2% higher for the day. Shares in the company were trading more than 10% higher earlier in the day after hitting an intra-day high of 4.2 cents. The Digital Wine share price has performed strongly in 2020, surging more than 600% since the start of June.

More reading

• UBS picks the best and worst ASX stocks from the reporting season
• Why the Zip share price is plummeting 15% today
• Facebook threatens to block news on its platform
• ASX 200 jumps 1.6%: Afterpay tumbles, IOOF crashes, CBA pushes higher
• Why Afterpay, IOOF, Redbubble, & Zip shares are dropping lower

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post The Digital Wine share price surges up on company update appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3gU4fIS

The Zip Co Ltd (ASX: Z1P) share price is plunging today, down 11.64% at the time of writing to $7.06 a share. Z1P shares opened at $7.26 this morning after closing at $8.01 yesterday and were down to $6.57 at one point, highlighting the swift and decisive nature of this move.

Zip shares have had a rollercoaster ride over the past fortnight. Exactly 2 weeks ago, Zip shares were asking $6.24. By 24 August, the Zip share price was up to $7.45 and by 26 August it was $9.65. After printing a new all-time high of $10.64 on Monday (representing a gain of more than 70% in under 14 days), the shares came crashing back to earth and have continued to fall ever since.

Why is the Zip share price crashing 15% today?

The selling of Zip shares has accelerated over yesterday and today – 2 days where the stock has shed more than 20% of its value. The catalyst behind this move is highly likely to be the announcement on Monday night (our time) that the American payments giant PayPal Holdings Inc. (NASDAQ: PYPL) is entering the buy now, pay later (BNPL) space that both Zip and arch-rival Afterpay Ltd (ASX: APT) are currently dominating.

PayPal is a payments company with a market capitalisation of approximately US$245 billion – no small fry. It’s known for both its stellar growth in the online payments space over the past decade and for being one of Tesla Inc. (NASDAQ: TSLA)’s CEO Elon Musk’s early business ventures.

PayPal released a statement on Monday outlining the launch of ‘Pay in 4’ to customers in the United States in the fourth quarter of 2020. This new product will allow customers to make a purchase and ‘pay in 4’ interest-free instalments. It will be embedded into PayPal’s existing payments infrastructure, which means merchants won’t be charged additional fees for its use.

This product is obviously a direct threat to Zip (and Afterpay) given PayPal’s size and scale in the payments market. This partly explains, in my view, why the Zip share price is cratering today.

Froth and volatility

It’s also worth noting that there was a lot of froth and volatility in the Zip share price, which is inevitable when you have a 70% move upwards over just 2 weeks. A share price movement like that is extremely vulnerable to a negative piece of news like we’ve witnessed coming out of PayPal.

With a lot of short-term traders likely sitting on massive profits, there would have undoubtedly been a lot of itchy fingers yesterday morning. This news was evidently more than enough to trigger some profit taking, which looks to be snowballing today.

Is Zip a buy today?

If you’re bullish on Zip’s long-term future and aren’t fazed by PayPal’s moves, then perhaps. But I’m certainly staying away from this frothy stock for now. There is clearly a lot of betting and trading going on with the Zip share price this week, and that’s something that I want no part of. It might be worth waiting for a real dip on this one, rather than the dramatic steam-letting we are seeing today.

More reading

• ASX 200 jumps 1.6%: Afterpay tumbles, IOOF crashes, CBA pushes higher
• Why Afterpay, IOOF, Redbubble, & Zip shares are dropping lower
• PayPal scares investors in BNPL shares, time to sell?
• ASX 200 falls 1.8%, Afterpay drops 8%
• Apple and Tesla are in the top 5 US shares bought by ASX investors this week

Sebastian Bowen owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends PayPal Holdings and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended PayPal Holdings. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Zip share price is plummeting 15% today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/32Ms3td

Facebook, Inc. (NASDAQ: FB) has threatened to block Australians from sharing news on its widely used social media platform. This comes as companies such as News Corp (ASX: NWS) have pushed for regulations that will force social media giants to pay for news content on their sites. 

The regulations are being drafted by the Australian Competition and Consumer Commission (ACCC) and have not yet been legislated. They will introduce an independent arbitrator to determine the amount that websites and social media providers will be required to pay for news content shared on their platforms.

Facebook Australia and New Zealand managing director Will Easton said the regulations misunderstood the dynamics of the internet. He went on to say that Facebook would either need to block news content or allow news publishers to charge as much as they wanted for content.

The ACCC responded, stating: “Facebook’s threat today to prevent any sharing of news on its services in Australia is ill-timed and misconceived”.

Clash of the titans

The Newscorp share price has not moved dramatically since Facebook flagged that it was considering blocking its content in Australia. At the time of writing, the Newscorp share price was up 2.0% to $20.62. It has been reported that Newscorp has said online giants should pay $1 billion for the news content they were currently sharing with users.

If Facebook and other online giants do not comply with the new regulations, they could face penalties of up to 10% of their revenue from Australia.

If Facebook goes ahead with blocking news for Australian users, Facebook and its other social media platforms including Instagram will be affected.

About the Facebook share price

Facebook is an online social media conglomerate based in the United States. Along with its flagship Facebook platform, the company also owns Instagram, Whatsapp and various other internet-based platforms. It listed on the NASDAQ in 2012.

In the 3 months to 30 June 2020, Facebook had total revenue of US$18.3 billion, up 11% compared to the same period in 2019. The average number of daily active users in the June 2020 quarter was 1.79 billion, an increase of 12% compared to the same period in 2019.

The Facebook share price closed at $295.44 in US trade, up by 0.76%.

Facebook shares are up 115.49% since a 52-week low of $137.10. The Facebook share price has returned 40.83% since the beginning of the year and is up 61.98% since this time last year.

More reading

• A strange thing is happening with index funds…
• Why Facebook stock surged to a new all-time high on Wednesday
• Zoom Video to soon appear on Amazon, Facebook, and Google smart display devices
• Want to own the FAANG stocks? Here are 3 ways you can
• Warren Buffett would applaud the share price gains of these undervalued ASX shares

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. Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook. The Motley Fool Australia has recommended Facebook. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Facebook threatens to block news on its platform appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Gof5KR

At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) is back on form and is charging higher. The benchmark index is currently up 1.6% to 6,050.2 points.

Here’s what is happening on the market today:

Buy now pay later shares sink.

Afterpay Ltd (ASX: APT) and its buy now pay later rivals have continued to sink lower on Wednesday. Investors have been selling their shares following an announcement by PayPal yesterday. That announcement revealed that the payments giant will be launching Pay in 4 in the United States in the final quarter of the year. Pay in 4 is a buy now pay later offering which allows consumers to pay for items in four interest-free instalments.

IOOF share price crashes lower.

The IOOF Holdings Limited (ASX: IFL) share price has crashed materially lower on Wednesday after returning from a trading halt. Investors have been selling the financial services company’s shares following the completion of the institutional component of its $1,040 million capital raising. IOOF raised a total of $734 million from institutional investors at a significant 24.4% discount of $3.50. This capital raising was undertaken to partly fund the acquisition of the National Australia Bank Ltd (ASX: NAB) wealth business, MLC Wealth for $1,440 million.

Bank shares mixed.

The big four banks are having a mixed day on Wednesday and are acting as a bit of a drag on proceedings. The best performer in the group has been the Commonwealth Bank of Australia (ASX: CBA) share price with a gain of 1.2%.

The best and worst ASX 200 performers.

The best performer on the ASX 200 on Wednesday has been the Western Areas Ltd (ASX: WSA) share price with a 6% gain. This morning the nickel producer provided a positive update on its Odysseus mine. The worst performer on the index by some distance has been the IOOF share price with a massive 21% decline. This follows the aforementioned capital raising.

More reading

• UBS picks the best and worst ASX stocks from the reporting season
• Why the Zip share price is plummeting 15% today
• Why Afterpay, IOOF, Redbubble, & Zip shares are dropping lower
• Why the IOOF share price is crashing 21% lower today
• PayPal scares investors in BNPL shares, time to sell?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post ASX 200 jumps 1.6%: Afterpay tumbles, IOOF crashes, CBA pushes higher appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/31MFudg