The All Ordinaries Index (ASX: XAO) is bouncing between small gains and small losses today. At the time of writing, the All Ordinaries is flat for the day.
It’s a different story for some of the big-name buy now, pay later (BNPL) shares.
The Zip Co Ltd (ASX: Z1P) share price is down 4.74% in lunchtime trade, while the Sezzle Inc (ASX: SZL) share price has sunk a painful 6.36%.
That sees both Zip and Sezzle shares trading in the unwelcome 52-week low basket.
Why are these All Ordinaries BNPL shares plunging?
The BNPL sector has broadly come under pressure over the past year after posting tremendous gains in the months following the outbreak of the global pandemic.
Some investors remain concerned that government will institute greater regulatory oversight of the industry, which could hinder their margins.
Other investors may have been selling as some big-name competitors enter the BNPL space, like US giant PayPal Holdings Inc (NASDAQ: PYPL) and Australia’s biggest financial institution, Commonwealth Bank of Australia (ASX: CBA), to name a few.
But companies like Zip and Sezzle are also being impacted by the wider tech sell-off hitting the ASX and global share markets as investors nervously eye a future of rising interest rates.
While the All Ordinaries is down 4.9% in the New Year, the S&P/ASX All Technology Index (ASX: XTX) has lost 18.6%.
And ASX BNPL shares could be facing an extra hit from rising rates.
As The Motley Fool reported earlier this month, Grant Halverson, the CEO of payments consultancy McLean Roche, said that “the BNPL sector could suffer from rising interest rates, which would make it trickier to make a profit and raise money.”
How do these BNPL shares compare with the All Ords performance?
Over the past 52 weeks the All Ordinaries is up 5.3%.
The Sezzle share price, meanwhile, has plunged a painful 82.4% in 52 weeks. And the Zip share price hasn’t done much better, down 77.1% for the full year.
The post Why these 2 All Ordinaries BNPL shares are plunging to 52-week lows appeared first on The Motley Fool Australia.
Should you invest $1,000 in Sezzle right now?
Before you consider Sezzle, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Sezzle wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of January 13th 2022
More reading
- Why AGL, Magellan, Xero, and Zip shares are sinking
- Do Affirm’s warnings raise red flags for the Zip (ASX:Z1P) share price?
- Why are these ASX 200 tech shares tumbling more than 6% on Friday?
- ASX 200 (ASX:XJO) midday update: IAG upgrades guidance, Magellan sinks again
- ASX BNPL shares in focus after Affirm (NASDAQ:AFRM) share price tumbles 21%
The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended ZIPCOLTD FPO. The Motley Fool Australia has recommended PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/ImANXqC
Leave a Reply