Zip Co Ltd (ASX: ZIP) shares are trading at their lowest level since February 2016.
Zip shares hit an intraday trough of 36 cents today, a 5.3% dip from yesterday's close.
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What's dragging Zip shares down?
It's possible that Zip shares are following Wall Street's lead on Friday.
The major United States buy now, pay later (BNPL) shares all fell overnight.
Block Inc shares dropped 2.42%, PayPal shares were down 1.81%, and Affirm stock fell 1.04%.
Among the ASX-listed BNPL stocks today:
- Block Inc CDI (ASX: SQ2) shares are currently down 1.45%
- Humm Group Ltd (ASX: HUM) shares are up 0.43%
- The Sezzle Inc (ASX: SZL) share price is up 11% despite its NASDAQ debut last night not going quite to plan
- Splitit Ltd (ASX: SPT) shares are down 28.79% after news this week it will be delisted
As my Fool colleague Mitch theorised yesterday, Zip shares may be falling this week due to macroeconomic headwinds, including a slight uptick in unemployment and softening consumer spending.
The Australian Bureau of Statistics revealed the unemployment rate rose to 3.7% in July this week. This equates to approximately 14,000 jobs vanishing in July, indicating higher interest rates are taking effect.
Other recent data shows a third consecutive month of reduced discretionary spending in June.
What's next for Zip shares?
In its 4Q FY23 update, Zip said it was on track to deliver its key goal of group-positive cash flow in 1H FY24.
This is in line with its company strategy to abandon ambitious global growth plans and focus on achieving profitability instead as a smaller company.
In its update, Zip said:
As at 30 June 2023, Zip had available cash and liquidity of $57.3m. Zip remains well funded with sufficient available cash and liquidity to support the company to achieve group cash EBTDA profitability during H1 FY24.
Zip will report its full-year FY23 results on 29 August.
