Daily Price Movement / General Discussion, page-154

Zip Co goes shopping for US investors, mulls second listing
Sarah Thompson, Anthony Macdonald and Tim Boyd
Feb 7, 2021 – 9.32pm
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Payments group Zip Co is going to the home of rival Afterpay’s biggest supporters to try to bridge a $35 billion valuation gap between the two companies.
It is understood Zip management will spend the next few days in front of US investors, seeking to explain the company’s buy now pay later payments platform and highlight its growth in the world’s biggest economy, where it owns QuadPay.

Zip founders Peter Gray and Larry Diamond have US investment bank Wells Fargo helping make introductions to US investors. James Brickwood
Sources said the purpose of the trip was twofold.
Firstly, Zip wants to tell its story and go shopping for new investors in what’s about to become its biggest market. It wants to tap into the same big-thinking funds that backed Afterpay’s BNPL business model and turned it into a $43.1 billion gorilla.
And, perhaps more interestingly, Zip wants to assess appetite for a potential US listing.
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It is understood Zip is considering issuing American Depository Receipts that would mirror shares in the company, trade in the US and give the company greater access to US capital markets.
It could keep its primary listing on the Australian Securities Exchange, and have a secondary listing for those investors who cannot make it to the ASX or would prefer to stick with stocks on the Nasdaq or NYSE for mandate or other reasons.
The ADR deliberations are said to be at an early stage, and come as brokers run around pitching such secondary listings to a bunch of listed Australian technology plays that they think could attract US investor interest. BHP, Brambles and Wesfarmers are among a group of Australian companies with existing ADRs.
Once again, it all harks back to Zip’s position in capital markets and its valuation. Zip shares trade at 12.4-times forward revenue, while rival Afterpay is three-times more expensive at 39.2-times.
Should Zip jump at the ADR plan, expect other Australian tech success stories to follow suit. Who doesn’t want a higher market valuation...
American investment bank Wells Fargo is helping Zip with this week’s roadshow, sources said.
Bank of America raised equity for the group last December. That deal saw Zip offer the new capital at $5.34, and issue 22.5 million new shares to raise the $120 million.
Shares in Zip closed on Friday at $8.68 for a market value of $4.79 billion.