Why is the Zip share price sinking 6% today?

A man holds his head in his hands, despairing at the bad result he's reading on his computer.

A man holds his head in his hands, despairing at the bad result he's reading on his computer.The Zip Co Ltd (ASX: ZIP) share price is having a disappointing finish to the week.

In morning trade, the buy now pay later (BNPL) provider’s shares are down 6% to 68.5 cents.

This means the Zip share price is now down almost 85% since the start of the year.

Why is the Zip share price falling?

Investors have been selling down the Zip share price on Friday following significant weakness in the tech sector.

For example, at the time of writing, the Block Inc (ASX: SQ2) share price is down 9% and the Sezzle Inc (ASX: SZL) share price is down over 7%.

This has led to the S&P ASX All Technology index dropping 3.4%, stretching its year to date decline to over 34%.

Today’s weakness has been driven by a selloff of tech stocks on Wall Street over the last two sessions after the US Federal Reserve made another major hike to interest rates.

The central bank also warned that more hikes were coming, which appears to have sparked fears that the US will fall into a recession in the near future.

Where next for Zip’s shares?

Opinion remains extremely divided on where the Zip share price will go from here.

For example, Citi currently has a sell rating and 80 cents price target, which is now higher than where its shares trade. Elsewhere UBS has a sell rating and lowly 45 cents price target.

Finally, the only bull I can find is Ord Minnett with an accumulate rating and $1.10 price target.

Time will tell which broker makes the right call.

The post Why is the Zip share price sinking 6% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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