1/5/2024 0 Comments Zip share newsIn addition, a number of major Australian banks such as Commonwealth Bank of Australia (ASX: CBA) have promoted their own offering.įurthermore, Zip is experiencing credit losses outside its target range. Titled “Apple Pay Later”, the service offering doesn’t charge any interest or late payment fees to customers. (NASDAQ: AAPL) also signalled its move into the BNPL space. ![]() With so many market entrants to the BNPL sector, it has become increasingly crowded. Why I won’t be a buyer of the Zip share price Today, the BNPL company has a market capitalisation of around $371.49 million. More than retail giant, JB Hi-Fi Limited (ASX: JBH). To put that into perspective, Zip was once valued more than $6 billion at its height. However, as quickly the BNPL market soared, it has now almost turned to dust. Government stimulus packages among record low interest rates drew an insatiable appetite for shoppers. The once gleaming BNPL industry was popular among investors as consumer trends shifted during the pandemic. Investors fall out of love with the BNPL industry While you may think Zip shares are too cheap at current valuations, here’s why I won’t be buying at all. This means the share price would need to increase by 900% to break even. That represents a massive 96% decline in just 16 short months.Īnd even when you look at year-to-date, its shares are down 90%. Shares are likely to remain under pressure until central banks begin easing back on the current monetary tightening cycle.What a rollercoaster ride it has been for the Zip Co Ltd (ASX: ZIP) share price.įrom reaching an all-time high of $14.53 in February 2021, the buy-now pay-later (BNPL) shares are now trading at 53 cents. With the Reserve Bank of Australia (RBA) flagged to most likely hike the official cash rate again today, you can see why the Zip share price is again deep in the red. It will work for any merchants that already accept Apple Pay. Apple said its offering comes with no interest rates and no late fees. Some analysts say the BNPL companies have not done enough to ensure that clients taking out small installment loans for purchases will be able to make those repayments.Īnd news out that global technology giant Apple Inc (NASDAQ: AAPL) is moving forward with its BNPL offering, Apple Pay Later, looks to be throwing up additional headwinds today. Many, including Zip, have also seen their bad debts increase. The companies have all faced stiff headwinds from fast-rising inflation and the resulting interest rate rises. Sezzle Inc (ASX: SZL) shares, for example, are down 95% over that time, while industry giant Block Inc (ASX: SQ2) – owner of Afterpay – is down 36% over the 12 months. The wider BNPL sector has come under intense selling pressure over the past 12 months. In fact, you have to go back to December 2017 to find Zip shares at a lower price than today.īut they are not the only BNPL company struggling. ![]() Barring a miraculous turnaround in afternoon trading, the company will end the day at its ninth multi-year low in the past month alone. It is also down 90% over the past year.īuy the dip buyers aren’t feeling the joy, with Zip shares now posting six consecutive days of losses. ![]() Since that milestone, the Zip share price has collapsed 94.1%. The buy now, pay later provider (BNPL) has come under sustained selling pressure since hitting all-time highs of $12.35 on 19 February last year. What’s going on with the Zip share price? Zip shares closed yesterday at 77 cents apiece and are currently trading for 69 cents. Shareholder faith is certainly being tested with dip buyers taking a bath as the Zip share price is down 9.8% in early afternoon trade. The Zip Co Ltd (ASX: ZIP) share price is sliding.
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