Zip Co Ltd shares face volatility following fraud event and quarterly update

Zip Co Ltd shares have experienced significant volatility following a disappointing FY27 first-quarter update and the disclosure of a fraud event in the United States. The company reported that an external fraud event in the US, involving coordinated individuals using legitimate credentials to execute unpaid transactions, resulted in approximately US$7.2 million (A$10.1 million) in cash operating expenses. This incident impacted total transaction volume (TTV) and new customer growth during July and August.

Despite the fraud, Zip reported that US TTV increased 41% year-on-year in September. For the first quarter, overall TTV grew 18% to $4.6 billion, and total income rose 17% to $376.1 million. However, net bad debts increased to 1.97% of TTV, up from 1.65% in the same period last year.

In response to recent share price movements, Zip has previously announced a $50 million on-market share buyback program and plans to seek shareholder approval for a one-to-five share consolidation at its upcoming AGM on November 19.