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Key points
- ASX BNPL pioneer Afterpay has left the building
- In its place, Block shares have made their ASX debut
- But how has the Zip share price reacted to its promotion to 'biggest BNPL share'?
Today is a watershed moment for ASX buy now, pay later (BNPL) investors. Afterpay Ltd, long the pioneer of BNPL on the ASX as well as the largest BNPL share on offer for investors, has just left the building. So what does this mean for the ASX's BNPL silver medallist, the Zip Co Ltd (ASX: Z1P) share price?
Yes, Afterpay shares are no longer available for investment. If you want a piece of the BNPL leader, you will instead have to buy the newly created Block Inc (ASX: SQ2) CHESS depository interests (CDIs). A Block share now represents an investment in Afterpay since the two companies are now effectively one.
But that also means that you will have to accept that all the other parts of Block's business come with the deal as well. That includes Block's uber-popular Cash payments app, as well as its holdings in cryptocurrencies like Bitcoin (CRYPTO: BTC).
So if an ASX investor wanted to remain invested in a pureplay BNPL company, Zip is the next cab off the rank in terms of market capitalisation, now that Afterpay has departed the ASX.
How has the Zip share price reacted to its new BNPL crown?
So how has the Zip share price reacted to its new place at the top of the ASX's BNPL ladder?
Well, not too happily, as it turns out. Zip shares are currently down by a nasty 1.9% today, trading for $3.59 each at the time of writing. That's actually a new 52-week low for Zip as of this Thursday. So if Zip shareholders were expecting a boost from the company's promotion to the ASX's top BNPL dog, unfortunately, that hasn't turned out to be the case.
That might be especially disappointing for Zip's investors, who watched the company deliver a second-quarter update this morning that had Zip's strong growth on display.
As my Fool colleague James covered earlier, Zip reported a 53% year-on-year increase in quarterly transaction volume to a record of $2.6 billion. That was along with a 58% increase in quarterly revenues to $167.4 million. Customer numbers also grew by 57% to 9.9 million, helped enormously by strong growth in the US market.
Meanwhile, the ASX's new Block shares have debuted and are trading at roughly $176.31 per share so far. That's a lot more expensive than the $66.47 per share price that Afterpay closed at and left the ASX on yesterday. But then again, this is a whole different company that has taken Afterpay's place.
