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Highlights:
- Sezzle Inc (ASX:SZL) was trading up after it announced plans for a Nasdaq listing.
- SZL intends to eliminate the Foreign Ownership Restricted United States person forbidden tag from the CDIs ahead of the Nasdaq listing.
- The company may go for a reverse split of its shares to meet the minimum bid price criteria of Nasdaq.
Sezzle Inc (ASX:SZL) shares moved higher on Tuesday, defying the overall weakness in the market. As of 1:00 pm, AEDT shares of the buy now pay later (BNPL) provider were trading up by 4.716% at AU$0.555, outperforming the broader ASX 200 index, which was down over 1.5% around that time.
The company today revealed its plans to list its securities for trading on Nasdaq. On such listing, Sezzle’s common stock securities, signified by CHESS Depositary Interests (CDIs), will keep trading on the ASX.
Additionally, Sezzle plans to eliminate the Foreign Ownership Restricted United States person forbidden tag from the CDIs ahead of the Nasdaq listing. This tag has so far effectively stopped the sale of CDIs on the Australian Securities Exchange to US people except when an exemption was available.
All about Sezzle’s Nasdaq listing
To fulfil the least US$4 bid price needed by the maiden listing requirements of the Nasdaq Global Market, Sezzel plans to go for a reverse merger of its shares provided shareholders approve it.
The company has not yet revealed what the reverse split would be. If it goes for a 15-1 reverse split, then existing company shareholders would see every 15 Sezzle shares they owned reduced to one share, and the price per share would jump 15 times. But the overall value of the shareholding would not change. Also, the company has said that it does not intend to raise any fresh capital.
Sezzle is planning to offer guidance to investors on stakeholder meeting timing for the Foreign Ownership Restricted United States person forbidden tag eradication and the upcoming Nasdaq listing around 30 September this year.
In another update on Monday, Sezzle said the company held US$1.2 million of cash with the collapsed Silicon Valley Bank. Out of the US$1.2 million, US$0.25 million is insured by FDIC. Hence, the fund at risk is nearly US$1 million. Sezzle's cash holding with Silicon Valley Bank is 2% of its total cash balance of US$68 million. SZL share closed with over 5% loss on Monday following this news.