Conducting a buyback at current share price levels is a poor use of capital. With $50 million, Zip can only purchase around 25 million shares, which is just 1.9% of the 1.3 billion shares on issue. That makes no meaningful impact on the share structure. Worse still, buying back now locks in poor value for shareholders, uses up cash that could fund growth or acquisitions, and reduces flexibility if the share price drops further. It also risks Zip falling behind competitors if funds are diverted from core operations. Launching a buyback too early sends the wrong message and does little to support long-term shareholder value.
ZIP Price at posting:
$2.00 Sentiment: Sell Disclosure: Not Held
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