Why BrainChip, GrainCorp, Redbubble, and Zip shares are dropping today

These ASX shares are in the red on Thursday…

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has fought back from earlier declines and is on course to record a small gain. At the time of writing, the benchmark index is up 0.1% to 7,340.3 points.

Four ASX shares have failed to follow the market higher today are listed below. Here's why they are charging higher:

BrainChip Holdings Ltd (ASX: BRN)

The BrainChip share price is down 6.5% to $1.99. This appears to have been driven by profit taking after some very strong gains in recent weeks. For example, even after this decline, the BrainChip share price is up 150% in 2022. Investors may also be questioning whether a company with such little revenue warrants a valuation of over $3.5 billion.

Graincorp Ltd (ASX: GNC)

The Graincorp share price is down 2% to $7.67. This appears to have been driven by a broker note out of UBS this morning. According to the note, the broker has downgraded the grain exporter's shares to a neutral rating with an $8.00 price target. UBS made the move on valuation grounds following a strong gain in recent months.

Redbubble Ltd (ASX: RBL)

The Redbubble share price has continued its slide and is down a further 4.5% to a 52-week low of $2.10. Investors have been selling the ecommerce company's shares this week following the release of a disappointing half year trading update. That update revealed weaker sales and a collapse in its profitability due to increased competition.

Zip Co Limited (ASX: Z1P)

The Zip share price is down 1% to $3.62. This is despite the buy now pay later provider reporting strong growth during the second quarter. Zip posted a 53% increase in transaction volume to a record of $2.6 billion and a 58% lift in quarterly revenue to a record of $167.4 million. A key driver of this growth was a 57% increase in customer numbers to 9.9 million. It appears as though some investors were expecting even stronger growth.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended 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.

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