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:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

illustration of laptop with down arrow and the word zip representing zip share price going down.

Image source: Getty Images

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.

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

women with her fingers crossed and eyes shut
BNPL shares

Prediction: Zip shares could explode over 230% to $5.27

Zip has faced multiple headwinds and slumping investor sentiment over the past six months.

Read more »

A man is shocked about the explosion happening out of his brain.
Bank Shares

Forget NAB shares, this ASX fintech stock could double in value

Most brokers see downside for NAB, but upside of up to 185% for this ASX share.

Read more »

A young woman looks happily at her phone in one hand with a selection of retail shopping bags in her other hand.
Share Market News

3 reasons to buy this oversold ASX growth stock today

Brokers are upbeat and see upside up to 196%!

Read more »

Photo of two women shopping.
BNPL shares

Are Block shares back in play?

Brokers are upbeat and see a 70% to 170% upside.

Read more »

A happy shopper with a wide mouthed smile holds multiple shopping bags up around her shoulders.
BNPL shares

Why Zip shares are bouncing back 5% today

Some brokers see current share price as a buying opportunity with 100%+ upside.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
BNPL shares

This expert thinks the Zip share price is a buy and could rise 140%!

This expert says Zip is an opportunity to buy now.

Read more »

A man in a business suit scratches his head looking at a graph that started high then dips, then starts to go up again like a rollercoaster.
BNPL shares

Down 45% in 2026, could you double your money buying the dip in Zip shares now?

A leading investment analyst says that the argument for buying the latest dip in Zip shares “must be asked”.

Read more »

Ecstatic woman on her phone giving a fist pump after reading some good news.
BNPL shares

Why are Zip shares rebounding 5% today?

This beaten down stock plans to buy its shares on-market.

Read more »