Zip Co Shares Halve Intraday On A$10.1 Million Fraud Cost

Zip Co fell as much as 50.5% to A$1.025 on October 23rd, 2026 after disclosing A$10.1 million (US$7.2m) of one-off costs from a US fraud event, then pared the loss to close down about 29%. The company reaffirmed all FY27 guidance on the same day.

Photograph of Cynthia Scott via theaustralian.com.au. Cover illustration by InsiderBuying.com.

Zip Co Limited shares lost half their value at one point on Friday, October 23rd, 2026, after the buy now pay later lender disclosed costs tied to a fraud event in the United States. The charge was A$10.1 million (US$7.2m) of one-off cash operating expenses, booked in the company's first quarter FY27 trading update lodged with the ASX.

The stock did not stay at its low. Reuters reported the shares fell as much as 50.5% to A$1.025, their worst intraday session and their lowest level in more than two years, before recovering part of the drop. Bloomberg reported the shares ended down 29%, the biggest fall since February 19th.

What happened

Zip said it had identified and contained an external fraud event in the United States in which coordinated individuals established new accounts using legitimate credentials and then executed unpaid transactions, according to Reuters (via Yahoo Finance) and AAP. The company said the event temporarily reduced total transaction volume and new customer growth in July and August.

Zip said it has notified the relevant authorities and lodged a claim with its insurer, Rask Media and AAP reported. No public filing has quantified how many fraudulent accounts were opened, and no insurance recovery has been quantified.

Why it moved

Reuters reported the early selloff erased about A$1.30 billion (US$912.08 million) from Zip's market value, using a rate of US$1 = A$1.4253. IBTimes Australia reported a close of A$1.4625, down 60.75 Australian cents or 29.35%, on more than 92 million shares traded, cutting the market value to about A$1.8 billion. AAP had the stock at A$1.51 in Friday afternoon trade, down 27.2% from Thursday's close.

Analyst reaction focused on controls and credit, not just the one-off charge. Reuters reported that Citi said the incident raises concerns about Zip's onboarding controls and that Jefferies wanted more clarity on whether the higher operating expenses would persist. Reuters also reported UBS called the bad-debt ratio a key miss against its 1.8% estimate. AAP reported RBC Capital Markets analyst Julian Mulcahy described the result as a beat on most metrics but with higher loss rates. More on the stock is at /companies/ZIP.

What the record shows

The underlying quarter was a growth quarter. Kalkine's summary of the ASX release and The Motley Fool Australia reported total transaction volume of A$4.6 billion, up 18.0% year on year, 31.6 million transactions, up 21.8%, 6.4 million active customers, 96,600 merchants and total income of A$376.1 million, up 17.0%. Capital Brief reported total income as $373.4 million.

Group cash EBTDA was A$65.0 million, up 3.4%, and would have been A$75.1 million, up 19.5%, excluding the fraud-related expenses, according to Kalkine, The Motley Fool Australia and Smallcaps. Net bad debts rose to 1.97% of TTV from 1.65% a year earlier, against an FY27 target range of 1.5% to 2.0%, per The Motley Fool Australia and Rask Media.

One more thing the record shows: the same single charge is circulating in two US-dollar forms. Rask Media and AAP render it as US$7.2 million (A$10.1 million), Bloomberg converted it as A$10.1 million ($7.1 million), and Investing.com's wire copy reported "$7.2 million" without naming a currency. Our own file carries no US insider trading record for this company, because Zip's primary listing is ASX:ZIP and no primary US listing was found.

What to watch

Zip reconfirmed all FY27 guidance metrics on the same day, including group cash EBTDA of A$340 million, up 26% year on year, US TTV growth above 30% and group operating margins of 20% to 22%, according to Capital Brief and Smallcaps. The company said US TTV growth accelerated to 41% year on year in US-dollar terms in September, with momentum continuing into October.

Group chief executive and managing director Cynthia Scott said customers were choosing to use Zip more often and that the company was well positioned for the holiday season, AAP reported. IBTimes Australia reported the shares are down more than 63% over the past year, and AAP reported the stock is down 55% year to date.

Reporting from Reuters (via Yahoo Finance Canada), Bloomberg, ABC News (Australia), AAP, Capital Brief, Rask Media, The Motley Fool Australia, Kalkine, Smallcaps and IBTimes Australia, dated October 23rd, 2026.

Informational only, not investment advice.