Zip Shares Jump Over 8% After Announcing A$50 million Buyback

April 8 (Reuters) – Shares of Australian "buy-now, pay-later" firm Zip Co (ZIP.AX) surged more than 8% on Tuesday after it revealed plans for an on-market share buyback of up to A$50 million (approximately $30.1 million), set to commence around April 23.

Figure 1. Zip Shares Soar Following $30 Million Buyback Announcement.

At one point, Zip's stock climbed as much as 20.2% to A$1.430, making it one of the top percentage gainers on the S&P/ASX 200 index (.AXJO), which was up 1.5% as of 0341 GMT. Figure 1 shows Zip Shares Soar Following $30 Million Buyback Announcement.

The rebound followed a sharp 7.4% decline in Zip's shares the previous day amid broader market sell-offs driven by tariff concerns and a steep drop in the Nasdaq.

"Zip Co was caught up in the sell-off frenzy and is now being bought back by bargain hunters. The A$50 million buyback is a definite sweetener to the stock," said Brad Smoling, managing director at Smoling Stockbroking.

The company noted that the exact number of shares repurchased will depend on various factors, including prevailing market conditions.

Who is Zip?

Zip Co Ltd is an Australian financial technology company best known for its "buy-now, pay-later" (BNPL) services. It allows customers to purchase items and pay for them in installments, making it a popular alternative to traditional credit cards. Zip operates in Australia and several international markets, offering digital payment and retail finance solutions.

What is a Share Buyback?

A share buyback is when a company purchases its own shares from the market. This reduces the number of shares in circulation, which can:

• Increase earnings per share (EPS),
• Boost shareholder value,
• Signal confidence in the company’s financial health.

In this case, Zip announced a buyback plan worth A$50 million (about $30 million USD).

Why Does This Matter?

Share buybacks are often seen as a positive signal by investors. They suggest the company believes its stock is undervalued and is financially stable enough to return capital to shareholders. Investors reacted positively to Zip’s announcement, viewing it as a vote of confidence in the company’s future.

What Happened to Zip’s Stock?

Following the announcement on April 8, Zip's stock price jumped over 8%, and at one point was up 20.2%, reaching A$1.430. It became one of the top-performing stocks on the S&P/ASX 200 index, which itself was up only 1.5% during that time.

The Bigger Picture

Just a day before, Zip’s shares had dropped 7.4% due to global market fears around tariff tensions. But the buyback news sparked renewed investor interest, with analysts saying it attracted "bargain hunters." While the actual number of shares repurchased will depend on market conditions, the announcement helped restore investor confidence in Zip after recent volatility.

Source: Reuters

Cite this article:

Priyadharshini S (2025), Zip, Australian Payments Firm, Surges On $30 Million Share Buyback Announcement, AnaTechMaz, pp. 83