#ZIP SHARE PRICE ASX ZIP#

Apple customers will be able to split their purchases into equal repayments without paying any interest or fees. Meanwhile, investors are turning away from the BNPL sector due to increasing competition and the prospect of much higher regulatory scrutiny.Įarlier this month, tech giant Apple announced its move into the BNPL space.

It may be a telling indicator that nearly 6 months since its announcement, Zip Co's all-stock acquisition of smaller US-focused rival Sezzle ( ASX: SZL) is yet to be completed. That may mean BNPL operators like Zip may have to wind back plans for expansion into new markets. I agree to the Privacy & Cookies Policy, Terms of Use, Disclaimer & Privacy Policy and to receive emails from Finder Reports show that the loss-making company has about $400 million of debt that needs to be refinanced in the next 2 years, raising concerns among investors over its future. Rising interest rates also directly hit prospects for these companies because they have built their business model on an easy supply of cheap money.Īs the cost of funds rises, it hits BNPL players hard due to their need to fund their interest-free payment offering in a business that already generates slim margins.įor example, in December, Zip said it had total debt of $2.4 billion, with net assets at $1.2 billion. Traders are betting on back-to-back 50 or 75 basis points hikes by the US central bank to control inflation, which could force the hand of other central banks and risk putting the global economy into recession.Īnalysts have for long flagged rising risks for the BNPL sector from interest rate increases because this directly hurts growth prospects for these companies as consumers cut spending amid a slowing economy.ĭespite the sector recording explosive growth over the last 3 years, none of these players are yet profit-making and now face a reckoning as margins are squeezed. It comes as prospects for aggressive interest rate hikes by the US Fed have jumped after data last week showed that US inflation hit a 40-year high in May. ASX-listed shares in US payments giant Block ( ASX: SQ2) – which now owns bigger rival Afterpay – were also down 5% on top of an 18% collapse in its shares on Tuesday. The latest slide in the BNPL sector stocks, led by Zip, comes ahead of a rate decision by the US Federal Reserve on Wednesday (Thursday AEST). They slid an astounding 15% on Tuesday and are continuing their downward momentum, dropping 4.3% to a fresh record low of 50.5 cents a share.

Zip shares lost more than 90% of their value over the last 12 months. Shares in the biggest pure-play buy now pay later (BNPL) operator on the ASX, Zip Co Ltd ( ASX: Z1P), were already one of the worst performers on the ASX before Tuesday's market rout. Even before Tuesday's slide, shares in the BNPL operator were down 90% over the last 12 months.

#ZIP SHARE PRICE ASX ZIP#

Zip share price asx