General Discussion

From my research today, Zip Co seems like a ticking time bomb. Yes, the 700% stock price rally has been incredible, but when you scratch beneath the surface, the risks are piling up, and the fundamentals just don’t seem to back up the hype.

Let’s start with the fact that Zip is still losing money. Sure, they pulled in $868 million in revenue last year, but they’re nowhere near profitability. This isn’t a brand-new company—it’s been around for over a decade. How much longer can they rely on investors’ patience before the losses start to outweigh the potential? Growing revenue without consistent profits is just kicking the can down the road.

Competition in the “buy now, pay later” industry is another massive problem. Zip is up against giants like Klarna, Afterpay, PayPal, and traditional banks. They’re all fighting for the same customers, and Zip doesn’t seem to have anything unique to offer. Customers can easily switch providers if someone else offers better terms, and loyalty in this sector is practically nonexistent.

Interest rates are the elephant in the room. As rates rise, the cost of borrowing skyrockets for companies like Zip, squeezing their already thin margins. On top of that, higher rates mean more financial stress for customers, which could lead to a spike in missed payments. If defaults rise, Zip’s revenue and reputation could take a serious hit.

Then there’s regulation. Governments worldwide are finally catching up to the “buy now, pay later” industry, and it’s not going to be pretty. Stricter rules like mandatory credit checks or caps on late fees could make Zip’s entire business model less profitable—or even unworkable in some markets. They’re already under scrutiny in Australia, and it’s likely only a matter of time before other countries follow suit.

And let’s talk about their so-called global strategy. Zip has already pulled out of Singapore and the United Kingdom, which makes me wonder if they can compete outside their home market. They seem to be retreating to Australia and the United States, but how sustainable is that? These are highly competitive markets, and without international growth, their long-term prospects look limited.

The recent resignation of co-founder Larry Diamond doesn’t help matters. Not only did he step down as a director, but he also sold more than half of his shares—30 million of them. That’s a massive exit and hardly a vote of confidence. Even if he’s sticking around as an advisor, actions speak louder than words, and dumping that much stock sends a pretty clear message.

Finally, the stock’s recent rally reeks of speculation. A 700% rise in one year feels less like a sustainable growth story and more like a bubble waiting to burst. If Zip misses even one financial target or if investor sentiment shifts, this thing could crash hard.

To me, Zip looks like a house of cards. The losses, the competition, the regulatory risks, the interest rate headwinds—it all adds up to a business that’s facing an uphill battle on every front. This might be a playground for short-term traders, but for anyone thinking long-term, I’d say it’s a disaster waiting to happen.

What do you all think? Is there any real value here, or are we watching a train wreck in slow motion?