'Operation Blue Sky': Inside Zip's struggle for survival
Citi analyst Siraj Ahmed, for example, raised his forecast for pre-tax cash income, depreciation and amortization (EBTDA) for 2023 and 2024 – the last years Zip hopes to move into the dark. However, in a sign of the uncertainty Zip still faces, Ahmed added a “high risk” rating to his “neutral” stance on the stock. BNPL businesses such as Zip and Afterpay provide interest-free short-term installment loans to consumers, and seek to challenge the strength of the global credit card industry. They were the darlings of the market last year, but have since been inundated by a wave of negative forces: high bad debt, intensifying competition, and plunging technology valuations, as rising interest rates cause investors to demand faster profits from cash-spending companies. In response, Zip unleashed a drastic reconfiguration of its business known internally as “Operation Blue Sky.” It promised to slash more than $30 million in employee costs, tighten new len...
