Borrowing money would just add more trouble to ZIP’s already fragile balance sheet, with $2.4 billion in debt against $390 million in shareholder equity made up mostly of intangibles and goodwill. Any attempt to raise capital would also require a shareholder vote, which in this environment would only add to the negative publicity for a company already struggling to regain confidence.
The situation with Star Casino is a clear warning. Like Star, ZIP’s value is largely tied up in receivables and a loan book. As we saw with the casino, real estate and flashy assets don’t always mean security—they can be easily overstated. ZIP could face a similar fate if it’s forced to liquidate, with little left for shareholders once the dust settles.
ZIP Price at posting:
$3.04 Sentiment: Sell Disclosure: Not Held
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