Zip Shares Drop 4.5% as Buy Now, Pay Later Firm Prepares Share Consolidation and Weighs Possible US Listing

SYDNEY — Shares of Zip Co Ltd. fell more than 4% on Wednesday, adding to a difficult year for the buy now, pay later provider.

Zip shares dropped 0.095 Australian dollars, or 4.48%, to A$2.025 in afternoon trading. The stock traded between A$2.00 and A$2.16, with about 12.7 million shares changing hands. The company's market value stood at about A$2.5 billion.

It was not immediately clear whether Zip had released new information. The shares are down about 52% over the past year.

Share consolidation planned

Zip recently announced plans to consolidate its shares on a five-for-one basis, subject to shareholder approval at its 2026 annual general meeting. The move would reduce the number of shares on issue from about 1.25 billion to about 249 million.

The company's board said the consolidation would give Zip a more typical capital structure for a company of its size and could make its shares more attractive to a broader range of investors.

Zip has also said it is exploring a possible dual listing on a U.S. stock exchange, should market conditions support it.

Record results

Zip's falling share price contrasts with its strong financial performance. In fiscal 2026, the company reported record cash earnings before tax, depreciation and amortization of A$268.9 million, up 57.9%, and net profit of A$116.4 million, up 45.7%.

Total transaction volume rose 27.2% to A$16.7 billion, driven by strong growth in the United States, where transaction volume and revenue rose more than 42% in local currency.

Zip has forecast fiscal 2027 cash EBTDA of about A$340 million and announced a share buyback of up to A$50 million.

Why the shares have struggled

Despite the strong results, Zip shares have fallen sharply amid a broad sell-off in technology stocks, concerns about consumer credit and investor caution about the buy now, pay later sector.

Some investors viewed Zip's fiscal 2027 outlook as only a modest increase given its rapid growth, prompting profit-taking after its results.

Analysts remain largely positive, with many brokerages rating the stock a buy and citing its valuation after the decline.

Investors will be watching Zip's upcoming annual general meeting, where shareholders will vote on the consolidation, as well as updates on U.S. growth and any progress toward a U.S. listing.