The Zip Co Ltd (ASX: Z1P) share price is down almost 12% right now. However, it is still up substantially over the last month.
What’s going on?
The entire buy now, pay later industry is suffering at the moment. Zip shares are at the bottom of the industry. But it’s red across the board:
The Afterpay Ltd (ASX: APT) share price is down 3.7%.
The Sezzle Inc (ASX: SZL) share price has fallen 11.4%.
The Splitit Ltd (ASX: SPT) share price has dropped 2.6%.
The Humm Group Ltd (ASX: HUM) share price has declined 1.9%.
One bad day for the Zip share price doesn’t erase the rest of the gains that it has made in recent times. Over the last month alone, the Zip share price is still up 114%.
Yesterday, Zip answered an ASX price query. That’s when the ASX asks businesses why the share price is moving significantly on no news.
Zip answered that it wasn’t aware of any information concerning it that had not been announced to the market. The buy now, pay later business did acknowledge that there had been significant interest in the buy now, pay later market generally.
Zip also pointed the ASX and investors in the direction of its second quarter trading update that it announced a few weeks ago.
In that update, it said that it achieved quarterly revenue of $102 million, up 88% compared to the prior corresponding period. The December revenue was $40.2 million, this represented growth of 94%. Quarterly transaction volume was $1.6 billion, this was an increase of 103%. The December transaction volume was $628.4 million, up 104%.
The number of customers rose by 97% year on year to 5.7 million and merchants on the platform rose by 73% year on year to 38,500. It achieved pleasing growth in both the US (with QuadPay) and in the UK.
Summary thoughts
It’s not surprising to see the Zip share price take a pause. Businesses aren’t going to go up every single day forever, particularly when the ASX queries it. Zip is undoubtedly generating a lot of transaction and revenue growth right now, but I’m not sure what a good price to buy it is, considering all of the investor interest right now.
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