Zip Co (ASX:ZIP) shares grabbed investors’ attention today, here’s why

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Highlights:

  • ZIP Co Limited shares traded 4.301% lower at AU$0.445 per share on ASX at 4:00 PM AEST today.
  • The BNPL operator is expected to provide the market with a detailed update on its progress at the upcoming 4Q22 result on 21 July.
  • Shares of other BNPL companies Splitit Payments Ltd. (ASX:SPT) and humm group limited (ASX:HUM) were down 12% and 8.910%, respectively.

 

The share price of ASX-listed financial technology company ZIP Co Limited (ASX:Z1P) traded 4.301% lower at AU$0.445 per share on ASX at 4:00 PM AEST today. In the last one year, ZIP Co shares have fallen nearly 94.76%, while the stock is down almost 89.72% year-to-date (YTD). The fall in the company's share price was seen despite there being no announcement from its side on the ASX board.

The Australian share market, however, closed on a positive note today after gaining 0.31% to 6,528.40 points. Information technology was one of the nine sectors contributing to gains on the broader index. The two sectors that landed in the red zone today were the Energy and Materials sectors. The S&P/ASX 200 Information Technology (Sector) XIJ was up 1.523% at 1292.700 points today.

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It is to be noted that the tech-heavy Nasdaq composite fell 0.15% at 11,053.08 points in the overnight trading on Wall Street. The tech stocks have come under a valuation burden this year, and the rising interest rates have added to the agony. It is usually seen that technology stocks underperform when interest rates are hiked. 

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ZIP’s latest announcement:

ZIP revealed via an announcement on Wednesday (June 22) that the company's underlying business is strong, and its acquisition of Sezzle is also on track. As per the company, the acquisition is heading to a shareholder vote later this calendar year. The BNPL company is expected to offset the impact of rising interest rates with a slew of initiatives, including the increase in consumer fees, merchant repricing, more customer repayment velocity, and weighted average margin benefits from refinancing legacy receivables.  As of 31 March 2022, ZIP had AU$303m in cash and liquidity and an additional AU$24m raised from the SPP in April.

The fintech company is expected to provide the market with a detailed update on its progress at the upcoming 4Q22 result on 21 July. Notably, ZIP's Non-Executive Director, Pippa Downes, resigned from her post on the ZIP Board of Directors yesterday (22 June). 

Meanwhile, shares of other BNPL rivals Splitit Payments Ltd. (ASX:SPT) and humm group limited (ASX:HUM) were down 12% and 8.910%, respectively.

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