Zip Co Ltd (ASX: ZIP) shares are sliding on Wednesday after the buy now, pay later group lost a long-running trade mark battle.
At the time of writing, the Zip share price is down 4.68% to $2.345.
That leaves the stock down around 19% in 2026, although it remains up about 18% over the past year.
The latest fall follows an ASX update confirming that the High Court of Australia has delivered judgment in proceedings involving Firstmac Limited.
Let’s take a closer look at the release.
Zip loses its High Court fight
In its announcement, Zip said the High Court has ruled against it in the ongoing Firstmac trade mark case.
The decision means Zip and relevant subsidiaries must stop using the “Zip” trade mark in Australia in relation to their products and services.
That change must happen within 28 days, unless the Federal Court allows another date.
Zip is one of the best-known names in Australian buy now, pay later (BNPL). Its brand appears across its app, merchant network, customer products, and marketing.
A forced change creates extra work at a time when investors have been hoping the company could stay focused on growth and profitability.
What changes from here?
The key point here is that this decision applies only to Australia.
Zip said the ruling does not affect its US business, which now represents about 80% of divisional cash earnings. It also said the decision does not affect the New Zealand business.
Both markets will continue using the Zip brand.
While that softens the blow somewhat, it can complicate things from a consumer perspective.
Australia remains the company’s original market, and the Zip name is still a visible part of the business locally.
Zip said it is prepared for this outcome and will use the change to evolve its Australian brand.
The company also said it will provide further updates in the coming weeks.
With that in mind, investors will now be watching how quickly the rebrand happens, how much it costs, and whether it creates customer confusion.
Foolish Takeaway
Zip’s US business is the main driver of group earnings, which helps explain why the sell-off has been contained.
Still, losing the right to use the Zip name across Australian products is not ideal and can appear messy.
Nonetheless, the company says it is ready to make the change.
For now, it seems that today’s decline looks like the market is just pricing in an unwanted distraction.
The post Zip shares sink after court loss. Is this ASX comeback stock in trouble? appeared first on The Motley Fool Australia.
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Motley Fool contributor Aaron Teboneras has no position 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 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 Scott Phillips.