Zip Co’s stock fell a staggering 50% after the company disclosed A$10.1 million in fraud‑related losses, roughly $7.1 million, in its latest quarterly update—its biggest one‑day drop ever.
The breach involved coordinated actors opening unauthorized accounts with legitimate credentials to funnel unpaid transactions across the United States, according to a Bloomberg report.
Net credit losses climbed to 1.97% of total transaction volume for the quarter ended September 30, up from 1.65% a year earlier, and the U.S. market alone reported a 1.93% loss, citing seasonal swings and the fallout of heightened fraud‑prevention measures.
Roughly 70% of Zip’s revenue comes from the Americas, meaning the U.S. incident impacted not just cash flow but also new customer acquisition during July and August.
The share plunge prompted a 15‑minute trading halt, with price dipping to its lowest point on record, and led to the resignation of chief executive of Zip’s U.S. division, Joe Heck, replaced by Rory Herriman as interim CEO.
Looking ahead, Zip Co has announced a review of its fraud detection and prevention protocols, though it has yet to issue a formal earnings guidance for the next quarter.