Shares of Zip (ZIP.AX), Australia’s prominent “buy-now, pay-later” firm, saw a significant boost, climbing over 20% on Tuesday after the company revealed a $30.1 million share buyback program.
The buyback plan, which will commence around April 23, is aimed at increasing shareholder value and stabilizing the stock amidst recent market volatility.
Zip’s shares reached a high of A$1.430, making it one of the biggest gainers on the S&P/ASX 200 index, which also rose by 1.5%. This spike followed a sharp drop in the company’s stock price the previous day, caused by the growing market uncertainty and tariff-related tensions. Despite the earlier 7.4% dip, Zip’s latest move attracted attention from bargain hunters, leading to its impressive recovery.
Buyback Plan Details and Market Expectations
The buyback program, which has been set at A$50 million, is expected to alleviate some of the pressure from the market’s current unease. Brad Smoling, Managing Director at Smoling Stockbroking, noted that Zip was caught in the broader market sell-off but is now benefiting from the buyback as an attractive opportunity for investors. The company’s statement clarified that the number of shares purchased in the buyback would depend on various market conditions.
Strong Earnings Reports and Future Outlook
Earlier in February, Zip reported a significant increase in its first-half cash earnings, more than doubling its performance. The growth was largely attributed to an uptick in total transaction volumes, increased revenue, and better management of debt arrears, indicating that Zip is on a strong growth trajectory despite external challenges.
Kosta Gushterov
Reporter at Coindoo
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Source: https://coindoo.com/zips-shares-surge-20-after-announcing-30-million-buyback-plan/