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When will it end? Zip share price plummets again on Tuesday

ASX BNPL shares have been widely sold off as investors eye a mid-term future with higher interest rates.
The post When will it end? Zip share price plummets again on Tuesday appeared first on The Motley Fool Australia. –

The Zip Co Ltd (ASX: ZIP) share price is sliding.

Again.

Shareholder faith is certainly being tested with dip buyers taking a bath as the Zip share price is down 9.8% in early afternoon trade.

Zip shares closed yesterday at 77 cents apiece and are currently trading for 69 cents.

What’s going on with the Zip share price?

The buy now, pay later provider (BNPL) has come under sustained selling pressure since hitting all-time highs of $12.35 on 19 February last year.

Since that milestone, the Zip share price has collapsed 94.1%. It is also down 90% over the past year.

Buy the dip buyers aren’t feeling the joy, with Zip shares now posting six consecutive days of losses. Barring a miraculous turnaround in afternoon trading, the company will end the day at its ninth multi-year low in the past month alone.

In fact, you have to go back to December 2017 to find Zip shares at a lower price than today.

But they are not the only BNPL company struggling.

Why are BNPL shares selling off?

The wider BNPL sector has come under intense selling pressure over the past 12 months.

Sezzle Inc (ASX: SZL) shares, for example, are down 95% over that time, while industry giant Block Inc (ASX: SQ2) – owner of Afterpay – is down 36% over the 12 months.

The companies have all faced stiff headwinds from fast-rising inflation and the resulting interest rate rises.

Many, including Zip, have also seen their bad debts increase. Some analysts say the BNPL companies have not done enough to ensure that clients taking out small installment loans for purchases will be able to make those repayments.

With the Reserve Bank of Australia (RBA) flagged to most likely hike the official cash rate again today, you can see why the Zip share price is again deep in the red.

Shares are likely to remain under pressure until central banks begin easing back on the current monetary tightening cycle.

The post When will it end? Zip share price plummets again on Tuesday appeared first on The Motley Fool Australia.

Should you invest $1,000 in Zip right now?

Before you consider Zip, you’ll want to hear this.

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More reading

Zip share price dips to yet another 4-year low on Monday
The carnage continues: Why the Zip share price has hit 7 multi-year lows in a month
Why Nanosonics, REA, Sayona Mining, and Zip shares are dropping
Why is the Zip share price sinking yet again on Thursday?
Is this a ‘fundamental flaw’ with ASX BNPL shares like Zip

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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