Zip Co Limited

ASX:ZIP

Zip Co Limited

ASX:ZIP
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$2.27 (+3%)
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#100
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13
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Reports (7) My Report Forum Investors
Forum Topics ZIP ZIP Z1P as a takeover target following acquisition of Afterpay?
SpectralRider
Added 5 years ago

Hi All,

Just looking to get a discussion going on this interesting topic given the recent news about Square & Afterpay and knowing Z1P is a popular hold among this community.

What do you think the likelihood is of Z1P being taken over and has that increased since this news?

Still trading at under $8/share it doesn't feel like the market is pricing in high chances of a takeover.

Or should we be looking at some of the smaller/more niche BNPL players that are flying under the radar (QFE comes to mind)?

Cheers.

7
Chagsy
Added 5 years ago

i just remembered where I read it. Joe Magyar from Lakehouse capital. You can read it here

https://www.lakehousecapital.com.au/2021/08/06/why-squares-39bn-bid-is-only-the-beginning-for-afterpay/


I forget where I read it but someone clever said that it doesnt make sense to buy a competitior in this space that isnt the market leader. It is likely the BNPL offerings will be subject to network effects with only a couple of global winners, and Square/APT, klarna and Paypal are looking like the titans.  

Zip might have a chance at being bought at a reasonable multiple (unlikely anything like that offered to APT) but the other smaller players (targeting consumers) will probably fade into irrelevance. As you note, niche players offering a different product might offer some chance of a decent return. I have looked at QFE but dont own as yet.

I havent spent a lot of time exploring this space, though. Others may have a better idea.

Should probably spend some more time doing something than being on strawman....

12
Hands
Added 5 years ago

Or maybe Spiltit SPT is a more likely target for players like Visa as they pitch to the merchant rather than the retail customer.

Splitit Instore is preparing to onboard many merchants once COVID restrictions lets them go onsite again.  Basically allows merchants to offer BNPL at point of sale.

There is also a whitehat version of Splitit, allowing merchants to brand their own BNPL offering... and allowing them to pick their own repayment periods, repayment amounts (eg 50% upfront - makes sense for shorter expiry or pricey goods), and maybe even interest charges?

6