Investors might have been hoping for a bounce in the Zip Co Ltd (ASX: Z1P) share price following the sharp 8.04% selloff last Thursday after the company announced its fourth quarter update.
Unfortunately, the Zip shares have been tipping lower in every single trading session so far this week.
At the time of writing, the Zip share price is down another 1.78% trading at $6.62.
Why is the Zip share price falling today?
The weakness in the Zip share price on Wednesday is broadly in line with the S&P/ASX 200 Index (ASX: XJO) and S&P/ASX Information Technology Index (ASX: XIJ) index, which are down 0.82% and 1.61% respectively.
Another factor possibly weighing on both Zip and ASX tech shares is the tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC), which fell 1.21% overnight.
BNPL sector falling flat
It’s a tough time to be bullish on the BNPL sector.
Take Openpay Group Ltd (ASX: OPY) for example. The emerging BNPL announced its June quarter results on Wednesday.
The company revealed classic high double digit and in some cases, triple digit growth across key operating metrics.
In addition, it cited the signing of strategic partnerships to drive merchant growth, an acquisition in the UK to expand into the automotive vertical and perhaps most importantly, plans to launch in the United States in early October 2021.
Despite its achievements and growth initiatives, the Openpay share price is down 2.5% at the time of writing and down almost 50% year-to-date.
While the example doesn’t directly relate to the Zip share price, it might flag the increasingly high expectations that investors might have for BNPL shares.
A similar case for the Zip share price?
The Zip share price met the same fate as Openpay when it released its fourth quarter results last week.
The company revealed triple digit growth for metrics including total transaction volume and revenue. As well as launching its BNPL products in Canada and Mexico.
The market met Zip’s achievements with a harsh 8% selloff. And this selling pressure carried over to this week, where the company’s shares are down another 7.11% to a near 6-month low of $6.59.
The post Down 7% this week, why the Zip (ASX:Z1P) share price keeps falling appeared first on The Motley Fool Australia.
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More reading
- Openpay (ASX:OPY) share price falls despite strong quarter and US plans
- CBA and Zip were among the most traded ASX shares last week
- World’s largest fund manager says ASX volatility a great buying opportunity
- Is the Zip (ASX:Z1P) share price a buy or a sell?
- Leading brokers name 3 ASX shares to sell today
Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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