Why has the Zip (ASX:Z1P) share price fallen 9% in the last month?

The Zip (ASX: Z1P) share price has taken a tumble during April, despite several positive announcements from the BNPL company

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Shares in Zip Co Ltd (ASX: Z1P) are generally the talk of the ASX, so why have they been slipping lower?

At the time of writing, the Zip share price is trading at $7.64. That represents a 45% fall from its highest closing price ever – $13.92 ­– which it nabbed just two and a half months ago.

Over the last 30 days, Zip shares have continued to fall, dropping by another 9% since 6 April.

So, what’s been driving the Zip share price recently? Let’s take a look at the month that’s been for the buy now, pay later (BNPL) provider.

Fall from grace

The Zip share price started strong in April, as investors responded well to the company’s third-quarter results. On the day the results were released, Zip’s shares closed 16% higher than the previous day.

Within its quarterly results, Zip delivered record revenue and transactions. It recorded an 80% increase in group quarterly revenue, raking in $114.4 million. As well as a 195% increase in transactions, processing an impressive 12.4 million. Zip also posted a 114% jump in quarterly transaction volume to $1.6 billion.

On 14 April, Zip’s shares were put into a trading halt. They stayed there until the following day when Zip announced it would undertake a $400 million senior unsecured convertible notes offering. The notes, which are convertible into fully paid ordinary shares at an initial conversion price of $12.39, mature 7 years after they were issued unless otherwise redeemed, repurchased, or converted.

That same day, Zip shared its co-founders Larry Diamond and Peter Gray had offloaded a total of 2 million shares for $9.18 apiece. As a result of the day’s news, the Zip share price fell another 6%.

The announcement, made on 20 April that the Bank of America (NYSE: BAC) has been slowly purchasing shares in Zip, didn’t help save its share price – which closed another 2% lower that day. Zip stated that the Bank of America now holds 6.15% of the company.  

The final news from Zip in April was when it announced its agreement with Adobe (NASDAQ: ADBE) to become an Accelerate partner in the Adobe Exchange Partner Program. The partnership will see Zip become the BNPL provider for Adobe’s e-commerce software, Magento. As a result of this last piece of news, the Zip share price gained a measly 1.6% by the day’s close.

The Zip share price since

Since Zip released its latest piece of news to the ASX, its share price has fallen another 13%.

Despite the poor monthly performance, the Zip share price is 37% higher than it was at the start of the year. It’s also still up 194% over the last 12 months.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Adobe Systems. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has recommended Adobe Systems. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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