It certainly hasn't been a fun time for the Zip Co Ltd (ASX: Z1P) share price in 2022 so far. Zip shares closed at $1.47 today, down a nasty 3.3% for the day's trading. That puts this buy now, pay later (BNPL) company rather close to its 52-week low of $1.40 a share.
Over 2022 so far, Zip is now down just over 66%. Over the past 12 months, those losses currently sit at a painful 80%.
So it's not like Zip shares haven't seen volatility before. It was only a little over a year ago that this BNPL share was asking over $14 a share. But most of Zip's losses have occurred since October last year. What is striking though is to see how much investors have marked Zip down.
Remember the 2020 COVID-induced crash? That saw many ASX shares briefly descend to levels that would seem ridiculous today. Zip was one. It saw a low of $1.18 on 19 March 2020.
So the pricing we see today puts Zip at only 29 cents above those COVID lows of 2020. Striking stuff indeed.
What's behind the Zip share price's woes?
Several things seem to have played a role here. For one, investors have lost a lot of faith in growth-y, tech shares like Zip over the past few months. Most of the shares that could be categorised as growth shares have seen big losses in recent months. That includes Block Inc (ASX: SQ2), Xero Limited (ASX: XRO) and Brainchip Holdings Ltd (ASX: BRN).
But investors have responded negatively to some of the company's specific news as well. The most dramatic was the announcement that Zip intends to acquire its fellow ASX BNPL share Sezzle Inc (ASX: SZL). Late last month Zip gazetted the potential tie up, outlining Sezzle's acceptance of what was then a $491 million all-scrip deal. Investors will receive 0.98 Zip shares for every Sezzle share owned under the arrangement.
But things have changed dramatically since that news came out. Investors seem to have given these plans a stamp of disapproval, judging by how the Zip share price has now fallen by more than 33% since the announcement.
So Zip shares have certainly had a year to forget. No doubt investors will be hoping it can't get any worse from here.
