Why did Zip Co (Z1P) rally today?
Z1P +13.73%: the AFR reporting overnight that US BNPL giant Klarna had picked up a 4% stake in the company. Traders jumped on the news today and Zip tracked higher through the session, taking top honours in the index today. Klarna was recently valued at over $40b in their latest round of funding (it’s unlisted) with total transaction volume expected to come in over $75b this year, around 10x that of Z1P. It’s 17m active customers is more than Zip, Afterpay and Sezzle combined.
Klarna are shaping up for an IPO later in the year, and a key stake in Zip will likely add another string to their bow. Zip has a short interest of around 8% of shares on issue (equates to around 44m shares held short), no doubt helping with the momentum seen today. We expect a strong quarterly update from them in the next week. We own in both Flagship Growth & Emerging Companies portfolios.
