The Zoom2u Technologies Ltd (ASX: Z2U) share price has slipped into the red in afternoon trade today and now trades at 59 cents.
There’s been no market sensitive news for the company, so let’s cover why the Zoom2u share price is dropping today.
What’s up with the Zoom2u share price today?
Zoom’s shares have been on the decline since the company announced a contract agreement with Telstra Corporation Ltd (ASX: TLS) three days ago.
Telco giant Telstra is now offering two-hour deliveries on its products for certain areas in Australia.
As such it has partnered with Zoom2u in order to be the courier that ensures each package arrives to its customers safely and surely.
Telstra won’t have to meet any volume milestones or requirements under the contract, nor is the agreement exclusive with Zoom2u.
Investors appear to have sold on the news, perhaps seeking a more favourable outcome for Zoom, or are perhaps unhappy with management’s deal-making skills.
Just before this announcement, shares in the parcel delivery platform had soared over 260% since making its ASX debut almost 3 weeks ago.
The surge was spurred on by an announcement last week that the company had signed its first enterprise customer under its Locate2u platform.
Amart Furniture Access will now use Zoom’s platform under a software as a service (SaaS) model for the next 24 months.
Aside from this, the company has Bing Lee on its books using its Zoom2u platform.
The momentum from these events hasn’t been enough to save the Zoom2u share price over the last few days, which has come off a high of 72 cents on 20 September.
A bit more on Zoom2u
Zoom2u operates under two segments, known as Zoom2u and Locate2u. The former is a segment platform that connects customers requiring logistics services with local drivers.
The second is a SaaS product that optimises a company’s logistics department through efficiency and transparency.
Zoom completed its initial public offering (IPO) three weeks ago now, listing at 20 cents – and its shares have since soared.
Over this time, the Zoom2u share price has climbed almost 200%, offsetting the small dip that’s being realised in today’s session.
At the time of writing, Zoom has a market capitalisation of $110.9 million.
The post Why the Zoom2u (ASX:Z2U) share price is plunging 8% today appeared first on The Motley Fool Australia.
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More reading
- Zoom2u (ASX:Z2U) share price soars 19% amid Telstra contract news
- Why Adore Beauty, ALE Property, Ausnet, & Zoom2u shares are charging higher
- Why the Telstra (ASX:TLS) share price is outperforming the ASX 200 today
- The Zoom2u (ASX:Z2U) share price has soared 267% in a week
- Why the Zoom2u (ASX:Z2U) share price is rocketing 28% higher today
The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. 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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