The Zip Co Ltd (ASX: ZIP) share price dropped 4% in morning trading after the buy now, pay later business announced the departure of its co-founder, Larry Diamond. It's currently down 1.5%, while the S&P/ASX 200 Index (ASX: XJO) is up 0.75%.
Larry Diamond has been an important figure in the ASX share's growth journey since its listing on the ASX, but he has his eyes set on other priorities. Before today, Diamond was a director of Zip and US chair.
The market doesn't seem pleased by the news, considering the negative reaction to the ASX announcement.
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Larry Diamond to exit
Zip announced that co-founder Larry Diamond has agreed with the board that he will step down from his positions as Zip director and US chair from today.
Diamond is going to establish a family office and foundation to "further his philanthropic endeavours". But, he will reportedly continue his commitment to Zip by remaining available to the company as an adviser on future strategic initiatives. Owners of Zip shares may like this.
Zip co-founder Diamond said:
Now is the right time for me to step back from my day-to-day role at Zip. I'm very proud of what Zip has achieved and have total confidence in the team that will be leading the company to continued great success. I remain a committed shareholder and supporter of Zip and the team.
What does Zip's leadership think of this change?
Zip's CEO and managing director, Cynthia Scott, pointed out how the business is prepared for this change:
Larry has been an inspirational leader at Zip and has made an enormous contribution in our sector. He has prepared the team well for this natural progression and is stepping down at a time when we have the leadership and broader team executing strongly on a strategy that is delivering for the company and its shareholders. Joe Heck, who joined as our US CEO in July, is doing a terrific job leading the growth of the US business and driving our significant opportunity in that market.
The Zip chair, Diane Smith-Gander, thanked Diamond for his contribution to the business:
We respect Larry's decision and express our appreciation of his extraordinary achievement, having co-founded Zip with Peter Gray in Australia in 2013. We acknowledge that there is a changing of the guard across the tech sector as companies have matured and their founders are now in a position to realise their next stage of contribution to their domestic and international communities, in Larry's case through his new Family Office and Foundation.
Zip share price snapshot
Incredibly, after all of the volatility over the past five years – the huge highs seen during the low rate environment of 2021 and the lows in 2023 – it's almost exactly where it was in late 2019. It's down 6% in the past five years, as shown on the chart below.
It will be up to Zip's new leadership team to take the company forward from here.
Currently, UBS projects that Zip will make $1.11 billion in revenue, $64 million in operating profit (EBIT), and $45 million in net profit after tax (NPAT) in the 2025 financial year. Net debt is predicted to finish FY25 at $2.4 billion.
