Zip Co Ltd (ASX: Z1P) shareholders could be in for a ride this week amid talk of a potential capital raise.
The Zip share price is currently at $2.195, a fall of 7.38% on yesterday's close. For perspective, the S&P/ASX 200 Index (ASX: XJO) is down 1.04% at the time of writing.
Let's take a look at what could be in store for this buy now, pay later (BNPL) share.
Image source: Getty Images
Capital raise rumours
Zip could be conducting a capital raise as soon as this week, according to reports in The Australian. This could happen in the lead up to its merger with Sezzle Inc (ASX: SZL).
Zip revealed to the market yesterday it is in ongoing talks with Sezzle about a potential acquisition. In a statement to the market, Zip said:
There is no certainty that the discussions will result in a transaction of any kind and Zip will keep the market updated in accordance with its continuous disclosure obligations.
The Zip Board remains committed to ensuring any transaction delivers value to shareholders and will always be disciplined in its assessment of potential opportunities.
As my Foolish colleague James reported, the Zip share price slumped yesterday on the back of an update from the company.
Zip is expecting to report a cash EBTDA loss of $108.1 million in its H1 FY22 financial results. The company also expects to report a record $302.2 million in revenue. However, Zip shares closed 7.78% lower on Monday.
The company will reveal the full details of its financial results on Thursday.
The Australian also reported fellow ASX BNPL share Humm Group Ltd (ASX: HUM) may also be planning an equity raise ahead of Latitude Group Holdings Ltd (ASX: LFS) taking over its instalment and credit card operations. A deal on the acquisition was struck between the companies last week.
Zip share price snap shot
The Zip share price has fallen nearly 49% year to date and 82% over the past 12 months.
In the past week alone, Zip shares have slipped 19%.
For perspective, the benchmark ASX index has returned around 5% over the past year.
