Shaun Ler: So, all stocks are driven by a combination of some fundamentals and investor sentiment. Now, Zip in particular, historically, it's been very, very sentiment and hype driven, and it's likely to remain the case over the medium term. So, I guess, the key to understanding Zip's share price movement is what is the broader market's sentiment? What are retail investors excited about and do they like what they hear? And of course, there's an element of picking the bottom, because many of the consumer financing and buy now, pay later stocks have been battered because of the market sell-off. We currently also think that Zip shares are undervalued, and the prevailing market price is assuming a very pessimistic downside.

And if you think about it, there's a lot of bearish rhetoric about Zip in recent months about how rising interest rates are bad, bad debts have worsened, higher OpEx to drive growth, calling off Sezzle. Basically, there's a lot of concerns about how Zip will not achieve profitability. But the latest update management give investors what they wanted to hear. They announced measures to cut costs, to reduce credit risk, to review other lossmaking operations, and the market like Zip's commitment to reducing cash burn and they view this as a sign that it will move towards profitability and hence, we get this share price spike.

Well, I won't call zip a meme stock per se, but what I would say is a lot of these stocks that have got many retail investors excited for the past few years are typically these stocks that display promising growth prospects, that are not making profits and are reinvesting all their gross profits towards driving future sales growth. So, if you think about it, Zip and the broader band of buy now, pay later companies do fall into this criteria, and what we've seen is many of these companies tend to trade on unrealistic multiples, tend to trade based on sales. And when interest rates are low, that's a very favorable environment. But when interest rates go up, and when inflation goes up, all of a sudden, these companies would encounter several difficulties like higher funding costs, higher operating expenses, and investors that have been burned due to suffering share market losses and could no longer fund their growth as before.

So, I would say, Zip is one of these kind of stocks that make many investors excited, and many investors tend to jump into the buy now, pay later bandwagon at any prices as we've seen in the past.