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Salubrious

6,540 Posts.

1555

01/05/22

00:06

Post #: 61126606
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Originally posted by valueinvesting: ↑

$1 or 80c doesn't matter anymore : at least for me. Lost 90% of capital on this. And I don't expect to recover all of my capital anymore.

There is a higher probability of broad market sell off next week(US Fed) and there after, one can expect some stability but i have abandoned my wishful thinking that this will ever reach pandemic valuations.

Macro factors might improve over the time but company specific issues such as credit quality, customers retention, bad debt, negative publicity, deb collection process and regulations and so on will continue to appear for whole BNPL sector.

Ultimately, only profit can propel ZIP share price but two biggest leading indicators of company turnaround would be, Bad debt % to revenue; Customers growth/ retention. Once i see improvement on these indicators, i'll start adding more until then no action from my side. If they decrease bad debt via tight lending but failed to retain the customers then that would be worrying sign. Moderate customers growth during debt management strategy is fair and justifiable.

My biggest concern is ZIP board and Senior Management(CEO). How can they not be prepared for Market sell off? They raise an equity when share price is at bottom. When share price was higher, sector was all bullish instead of being pragmatic, risk averse and adopting fiscal discipline they were investing money all over the world. It seems they are no different or competent than us. Then why the hell we should reward them with stock options and higher salary?

Last but not least, all the LT holders who have lost significant amount of money; just hang in there. As I mentioned in my earlier post, i had lost almost 90% on Syrah but still managed to make profit despite share never reaching same valuations as before. Just wait for the turnaround indicators and bet big. Again, SYR and ZIP operates in different industry, i might have been lucky on SYR who is to say and averaging strategy may not be successful on ZIP but its all about risk, reward and luck. For now, its just a waiting game.

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It does look dire for ZIP given the macro environment, not saying it's the case but often when co's look like they're shagged is the best buying opportunity.
I'll back ZIP to fail, so won't be buying, but, it may be the opportunity around now. And management rewarding themselves is pretty poor form.
I just don't see how BNPL sector recovers, the printing press has stopped and I think we'll see co's running losses with bad business models / nothing unique go bust. Best case here is a buyout IMO.

ZIP Price at posting: $1.10 Sentiment: None Disclosure: Not Held
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(20min delay)
Last $1.50		Change 0.085(6.03%)		Mkt cap ! $1.684B

Open	High	Low	Value	Volume
$1.41	$1.50	$1.40	$22.39M	15.38M

Buyers (Bids)

No.	Vol.	Price($)
3	16337	$1.49

Sellers (Offers)

Price($)	Vol.	No.
$1.50	255886	9

View Market Depth

No.	Vol.	Price($)
3	16337	1.490
3	45901	1.485
6	93940	1.480
3	213873	1.475
3	113639	1.470

Price($)	Vol.	No.
1.495	255886	9
1.500	745639	100
1.505	67360	7
1.510	132868	12
1.515	58288	3

Last trade - 16.10pm 27/06/2024 (20 minute delay)

ZIP (ASX) Chart

Be prepared for under $1, page-29

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Be prepared for under $1, page-29

Top Stories

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Sheffield Resources achieves milestone production, shipments at Thunderbird, WA

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