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Highlights
- Sezzle shares closed trading flat at AU$0.20 apiece today (July 7).
- Shares of Sezzle have fallen around 59% in the last five-day trading session.
- Sezzle shares are falling after the company’s merger with Zip got cancelled.
Shares of fintech company Sezzle Inc (ASX:SZL) have been continuously falling and reported an almost 59% fall in the last five-day trading session.
Sezzle shares closed today’s trading flat at AU$0.20 apiece as there was no change from its previous close. This is despite the All-Ordinaries Index (ASX:XAO) closing in the green today (14 July 2022), 0.60% higher at 6,848.60 points.
Sezzle closed last week at AU$0.47 per share. With today's decline, it has recorded negative growth of around 37% in the past month and 94% on a YTD basis.
Meanwhile, S&P/ASX All Technology Index ended the day in green with a 2.15% gain at 2,040.90 points.
Why is Sezzle's share price plummeting?
The sharp decline in the share price of Sezzle was recorded after the cancellation of company's multi-million deal with Zip Co Ltd (ASX:ZIP).
Both Zip and Sezzle announced on Tuesday (12 July 2022) that they had called off the merger signed on 28 February 2022. The decision was taken after considering the macroeconomic and market circumstances.
As per the agreement, investors in Sezzle were due to get 0.98 ordinary shares of Zip for every Sezzle share they owned.
Post announcement, Zip shares responded positively, and today too, its shares closed 0.93% higher at AU$0.54 apiece.
Source: © Timonschneider | Megapixl.com
What does Sezzle do?
Sezzle Inc. is a payments company that uses technology that operates in the US, Canada, Europe, and India. The business links customers and merchants by offering payment solutions at brick-and-mortar and online retail venues.
Customers can use its platform to make online purchases and spread out the cost of those items over six weeks in four equal, interest-free instalments. Sezzle started its operations in 2016 and has its corporate headquarters in Minneapolis, Minnesota.
As part of the mutual termination, Sezzle will receive US$11 million from Zip U.S. to pay for legal, accounting, and other transaction-related costs.
BNPL market in Australia
According to ResearchAndMarkets.com's Q4 2021 BNPL survey, BNPL payments in Australia are projected to increase by 72.1% annually to reach US$13516.0 million in 2022.
The use of BNPL payments is anticipated to increase significantly throughout the projected period, with a CAGR of 42.7 percent between 2022 and 2028. By 2028, the country's BNPL Gross Merchandise Value, which was US$ 7854.4 million in 2021, will be US$ 114141.5 million.
In Australia, the industry has maintained strong growth over the past four to six quarters, and the trend is anticipated to remain for the foreseeable future.
According to the Reserve Bank of Australia, the Australian BNPL market is one of the most competitive due to more than 20 BNPL participants. Leading international payment companies' arrival is anticipated to increase competition in the highly competitive BNPL industry. For example, in October 2021, Visa launched its BNPL offering "Visa Installments" in Australia.
