Zip shares (ASX: ZIP) fell 4.01% to A$2.87 on Tuesday, extending a steep decline that has seen the buy-now-pay-later provider shed 40% of its value since early October, raising questions about whether the stock can hold critical technical support.
The Australian fintech closed at A$2.87, once again testing support around the A$2.85 level that has become a focal point for traders watching the stock’s trajectory. Year-to-date, Zip shares have declined 14.33%, with the selloff accelerating dramatically over the past four months. The sustained downward pressure marks a sharp reversal from the momentum the stock enjoyed through much of 2025, when strong financial results and strategic initiatives had driven gains.
Trading volumes have remained elevated during the decline, suggesting genuine selling pressure rather than a mere lack of buyers. The stock’s descent has taken it well below levels seen during its August 2025 rally, when the company announced an expanded partnership with payment technology firm Stripe in the United States.
Leadership Transition and Profit-Taking
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The recent weakness follows several significant corporate developments. In early January 2026, Zip announced that co-founder Larry Diamond had stepped down from his roles as director and US chair to focus on philanthropic endeavors. The leadership change triggered an immediate 4% drop in the share price, as markets digested the implications of losing a founding executive who had been instrumental in the company’s US expansion strategy.
Just days later, on January 13, the stock plunged 7.61% to A$3.28 amid widespread profit-taking. Analysts noted the shares had entered overbought territory following recent gains, prompting traders to lock in profits and contributing to downward momentum that has persisted.
Strong Fundamentals Amid Market Skepticism
The selloff stands in contrast to Zip’s operational performance. In February 2025, the company reported record half-year earnings, with cash EBITDA of A$67.0 million, representing a 117.1% year-on-year increase. Total transaction volume reached A$6.2 billion, up 23.9% compared to the prior corresponding period. The United States market emerged as a significant growth driver, accounting for 70% of total transaction volume.
The company’s strategic initiatives have also progressed. The expanded partnership with Stripe, announced in August 2025, enables merchants to integrate Zip as a payment method more seamlessly, potentially broadening the company’s merchant network and customer base in its largest growth market.
In its FY25 results update, Zip confirmed it is actively considering a dual listing on the Nasdaq while maintaining its primary ASX listing. The potential move aims to broaden the shareholder base and align the listing venue with the company’s largest growth market, though no timeline has been provided for a final decision.
Technical and Strategic Outlook
The A$2.85 support level has now been tested multiple times, and technical analysts suggest a decisive break below this threshold could trigger further selling toward the A$2.50 region. Conversely, a bounce from current levels could see the stock attempt to reclaim the A$3.00 psychological level.
The disconnect between operational performance and share price movement reflects broader market concerns about the buy-now-pay-later sector, including regulatory scrutiny, competition from traditional financial institutions, and questions about sustainable growth rates as the industry matures.
Markets will be watching closely for any updates on the Nasdaq listing consideration, which could provide a catalyst for renewed interest. The company’s ability to maintain its strong US growth trajectory, particularly through the Stripe partnership, will be critical in determining whether the current support level holds or gives way to further declines. With leadership transition complete and operational metrics remaining robust, the coming weeks will test whether markets are willing to look past near-term volatility and refocus on Zip’s fundamental transformation into a profitable, diversified payments platform.
