Zip Co Shares Move Lower As Brief Bounce Takes Pause

Zip Co shares (ASX: ZIP) fell 8.16% today to close at A$1.58, pausing a two-day bounce that had given bulls some respite, but leaving longer-term holders nursing steep losses across many meaningful time-frames.

The sharp intraday decline erased much of the momentum from a volatile rally that had seen Zip shares bounce 15% in two sessions to sit at A$1.72. Despite Thursday’s setback, the stock remains 6.04% above Monday’s close, underscoring the extreme volatility that has come to define trading in the fintech name.

The picture for ZIP looks worse over many longer periods, with the shares down 10% over the past month, 52.99% year-to-date, and a rather unnerving 79.6% below its level from five years ago.

Recent Drivers of Sentiment

The latest pullback comes against a backdrop of significant structural changes in Zip’s shareholder register and trading dynamics. On 11 March, Australian Retirement Trust formally notified the market it had reduced its stake below the 5% substantial-holder threshold, effectively exiting as a major institutional backer. The move likely put sustained selling pressure on the stock through the first quarter, creating an overhang that has made rallies fragile and short-lived.

On the operational front, Zip has posted strong headline numbers in recent quarters, with cash EBTDA climbing to around A$69 million at one stage, up more than 200% year-on-year, and transaction volumes continuing to grow across its ANZ and Americas segments. The company has also been running an on-market share buyback, initially announced in April 2025 with a limit of up to A$50 million over 12 months, which was subsequently expanded in October as management sought to deploy balance-sheet capacity to support the stock.

That buyback provides a theoretical floor, but one that has not been strong enough to absorb heavy selling from exiting institutions or macro-driven risk-off moves in high-beta financials and technology names. The ASX Info Tech (XIJ) is itself down 28.13% YTD, with many on the index facing sharper pullbacks.

What Next for Zip?

The battle lines between bulls and bears on Zip point to a couple of different outcomes.

Bulls point to improving unit economics, growing profitability in key markets, and the potential for significant operating leverage if revenue trends continue. They view the exit of Australian Retirement Trust as the removal of a major overhang, clearing the way for a cleaner recovery led by remaining institutions and retail momentum, with the CEO’s increased equity exposure and the ongoing buyback are seen as signals that management believes the share price materially undervalues long-term earnings power.

Bears, however, remain sceptical of the BNPL model’s structural resilience, citing concerns about credit quality, regulatory headwinds, and elevated funding costs in a higher-rate environment. They interpret the ART exit as a negative vote on long-term risk-reward and argue that Zip’s history of dilution has left too many investors with “scar tissue” who are quick to sell into any strength. The fact that rallies are being driven by speculative flows rather than fundamental buyers reinforces the view that Zip remains a trading vehicle rather than a core portfolio holding in their eyes.

The company’s next quarterly update will be closely watched for evidence that cash EBTDA growth is sustainable and that bad-debt ratios remain under control. For now, Zip remains caught between improving operational fundamentals and a deeply damaged long-term chart. A fightback could be on the cards, but more evidence may be needed if the bulls are able to flip any from the other side.