she's really steering the ship wellWhen Diane Smith-Gander took...

she's really steering the ship well

When Diane Smith-Gander took over the Zip Co chairmanship (from Melbourne silk Phil Crutchfield) on February 1, she must have thought her stars had aligned.

Zip’s share price would in the following two weeks double to an all-time high of $14.53. Alas, it would then begin a long, slow decline.

Diane Smith-Gander: a matter of timing.

It closed on Friday at $4.83, down 66.7 per cent from its peak and 36.9 per cent below where it was on the day she assumed her position.

With Afterpay soon to be subsumed into Jack Dorsey’s Block (until Friday known as Square), Larry Diamond’s Zip will soon become the leading buy now, pay later stock on the Australian sharemarket. It’s a crowded field, though.

As veteran payments analyst (and vehement pay later sceptic) Grant Halverson has pointed out, this country has no fewer than 11 buy now, pay later providers listed on the ASX. The rest of the world’s bourses have a mere four! Which is one less than the number of buy now, pay later outfits listed on the ASX that don’t even operate in this country.

But in a world of rising inflation and interest rates, the Australian investment community’s seemingly boundless enthusiasm for anything that looks like the next Afterpay has dimmed.

Humm (the old FlexiGroup) is down 43.5 per cent from its February peak. Openpay is down 69.7 per cent. US-based (though ASX-listed) Splitit is off 83.1 per cent, and even Afterpay closed at $98.24 on Friday, some 35.4 per cent below its highs and well below the $124-a-pop valuation reached with Square for months ago (it fell 6 per cent on Thursday after a shareholder meeting to approve a scheme of arrangement was postponed because of a delay securing approval from the Bank of Spain).

While a sectoral reckoning to something approaching normal valuations was long overdue, and Zip’s share price is merely back to where it was early last year, it’s never fun (and always much harder) to oversee the correction. Smith-Gander must now be ruing her timing. Of course, after paying a toppy $39 billion (in scrip) for the cream of the crop, Dorsey must be doing the same.