Why the Zip (ASX:Z1P) share price is down almost 25% this month

The Zip Co Ltd (ASX: Z1P) share price has erased some serious gains over the past monht. We take a closer look at what is dragging the company’s shares lower.

| More on:
illustration of laptop with down arrow and the word zip representing zip share price going down.

Image source: Getty Images

Its been a turbulent month for the Zip Co Ltd (ASX: Z1P) share price, shedding close to 25% in just a month. This comes despite the company reporting a strong result for Q3 FY21 while surging ahead with its expansion strategy.

At the time of writing, the buy-now, pay-later (BNPL) company’s shares are fetching for $7.03, up 2.9% for the day.

What’s happened to the Zip share price?

It’s been a hard pill to swallow for investors, seeing their Zip holdings plummet in value.

The company reported outstanding figures across its global operating markets for the third quarter. However, as is the yearly tradition in May, an ASX market slump has continued the Zip share price onslaught.

Interestingly, just before the company’s shares fell further, Zip co-founders, Larry Diamond and Peter Gray sold some of their holdings. The news did not appease investors concerns, with 1.5 million and 500,000 shares sold by the co-founders on 15 April, respectively. The off-market trade price that sold of those shares, went for $9.18 a pop, a far cry from its current share price.

In further news, just 2 weeks after, both co-founders were issued almost 40,000 shares between each other for a price of $8.32. While it may be insignificant in the scheme of things, the allocation was ill-timed, with inventors dumping Zip shares from that day forward.

With no new news out of the company in the past 30 days, investors will no doubt be keeping a close eye on any updates.

Zip is projected to release their preliminary final report for FY21 in late August.

Foolish takeaway

Adding on today’s gain, the Zip share price has accelerated close to 130% when looking at the past 12 months. The company’s shares reached an all-time high of $14.53 after reporting its half-year results. However, severe profit taking swopped in dragging Zip shares lower over the following month.

Based on today’s prices, Zip commands a market capitalisation of around $3.9 billion, with approximately 554 million shares outstanding.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

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

More on BNPL shares

A bride looks over the shoulder of her groom with a grimace on her face.
BNPL shares

‘Just horrific’: Why this fundie says Zip should abandon its Sezzle takeover

Is the Sezzle and Zip marriage doomed from the start?

Read more »

A male ASX investor sits cross-legged with a laptop computer in his lap with a slightly crazed, happy, excited look on his face while next to him a graphic of a rocket shoots upwards with graphics of stars scattered around it
BNPL shares

The Zip share price is rocketing 6% today. Here’s why

The buy now, pay later company is enjoying a change of fortunes today, along with its fellow ASX tech shares

Read more »

Two men shaking hands on a merger.
BNPL shares

Zip just joined forces with another ASX 200 company

A major airline now allows travellers to pay for their flight after they return home, in a landmark deal.

Read more »

Man with his head on his head with a red declining arrow and A worried man holds his head and look at his computer as the Megaport share price crashes today
BNPL shares

Zip share price dives to yet another multi-year low

The Zip share price is copping another hammering so far this Thursday...

Read more »

a woman looks exhausted and overwhelmed as she slumps forward into her hand while looking at her laptop screen.
BNPL shares

Why is the Zip share price down almost 25% in a month?

The BNPL company's shares are continuing to dwindle...

Read more »

Sad woman with her hand on her head and holding a credit card.
BNPL shares

Why is the Sezzle share price tumbling on Tuesday?

Sezzle shares are falling today after the BNPL provider released an update...

Read more »

a young man sits on the floor with his back against a sofa hunched over his phone in one hand and his other hand on top of his head as though he is seeing bad news as his face looks sad and anguised.
BNPL shares

Why is the Block share price sliding today?

The BNPL ASX share appears to be following in the footsteps of its US counterpart.

Read more »

A male party goer sits wearing a party hat and with a party blower in his mouth amid a bunch of balloons with a sad, serious look on his face as though the party is over or a celebration has fallen flat.
BNPL shares

Why did the Zip share price just pop then drop?

The Zip share price took off this morning before tumbling this afternoon. Could this be why?

Read more »