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

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.

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.

Should you invest $1,000 in Bhp Group right now?

Before you buy Bhp Group shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Bhp Group wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 7 February 2025

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 young woman in a shop hands her credit card to the cashier
BNPL shares

Own Zip shares? Here's what to watch when the company reports next week

After big returns in 2024, here’s what to expect from the buy now, pay later company in next week’s report. 

Read more »

A young boy with a sombre face looks down at the zip fastener at the bottom of his jacket as he concentrates on unfastening the clasp.
BNPL shares

Should you buy the 34% dip on Zip shares?

After crashing 34% in a month, what’s next for Zip shares?

Read more »

A worried woman looks at her phone and laptop, seeking ways to tighten her belt against inflation.
BNPL shares

Zip share price feeling the heat from looming BNPL regulations

Australia’s pending BNPL regulations are throwing up headwinds for Zip shares.

Read more »

A wide-eyed man peers out from a small gap in his black zipped jumper conveying fear over the weak Zip share price
Earnings Results

Why did the Zip share price just crash 20%?

Up 275% in a year, Zip shares are getting smashed on Thursday. But why?

Read more »

A happy young couple lie on a wooden deck using a skateboard for a pillow.
BNPL shares

Are Zip shares a sell or could they keep rising?

Analysts have given their opinions on this high-flying stock.

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
BNPL shares

Zip shares rocketed 363% in 2024! Can they keep rising?

Why did this BNPL stock smash the market? Let's find out.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
BNPL shares

Up 39% in a year, why this ASX 200 stock is forecast to outperform again in 2025

A leading fund manager expects more outperformance from this top ASX 200 stock this year.

Read more »

A businessman stacks building blocks.
BNPL shares

The ASX 200 stock with 'a strong outlook for 2025'

Racing ahead of the benchmark this year, the ASX 200 stock could keep outperforming in 2025.

Read more »