Backing up
@Tekvest here—ZIP’s position is far weaker than some seem willing to admit. The idea that the company is self-funding is more of a hopeful narrative than a proven reality. Management and analysts can claim there’s no immediate need to raise capital, but let’s face it: ZIP’s options are severely constrained, and any stumble could expose serious cracks in their model.
Under ASX Rule 7.1, they can’t even raise additional capital without shareholder approval because they’ve exhausted their placement limits. The fact that they’re locked into this position tells you how much they’ve already stretched themselves. Any attempt to raise funds now would not only dilute shareholders but also send a massive signal of weakness to the market.
And borrowing? Sure, in theory, they could take on more debt—but let’s not pretend this is a viable solution. In today’s high-rate environment, any borrowing would come at crippling costs, eating further into already razor-thin margins. ZIP’s balance sheet simply isn’t equipped to take on more pressure, and any misstep could turn into a death spiral.
This isn’t just a discussion about constraints; it’s about whether ZIP even has the flexibility to survive in a tough market. Ignore these red flags at your own risk.Let me know if you want to sharpen it even more!
Looking forward to this weekend’s discussion on Zip.
Goodnight.
(20min delay)