Shares in money-transfer and digital-payments company MoneyGram International (NASDAQ: MGI) have been soaring all month and are up 23% today as of 3 p.m. EDT.
While the gains month-to-date have come from updates on the performance of the business, today's move looks to be related to something entirely different.
With no company-specific news today, the drastic rise in shares is likely related to another transaction in the sector. It was announced today that Visa (NYSE: V) has taken a minority stake in the U.K.-based fintech, payments-processor Global Processing Services (GPS).
Image source: Getty Images.
GPS said that it has secured a strategic investment from digital-payments leader Visa. GPS has been a partner of Visa's since 2013. This may have gotten MoneyGram investors excited, as Visa Direct -- Visa's international real-time payment-solutions platform -- has worked with MoneyGram in developing its digital-money transfer platform over the last several years.
MoneyGram's business has been strong throughout the pandemic. It reported recently that September marked the ninth straight month of triple-digit, cross-border transaction growth in its direct-to-consumer business. The segment, dubbed MoneyGram Online, grew 161% compared to the same period a year ago.
The business results have driven momentum in the stock, with shares up 136% since the start of 2020, including today's move. With Visa's investment in GPS, some may think the payments giant might have its sights on MoneyGram.
"GPS is an example of how we continue to invest in, and partner with, companies that provide valuable capabilities to the ecosystem and have potential to advance the payments industry," Visa Ventures Vice President Kevin Jacques said in a statement.
It's not a stretch to think that MoneyGram International is also one of those types of companies.
10 stocks we like better than MoneyGram International
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and MoneyGram International wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of September 24, 2020
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.