Why is the Sezzle share price surging 8% on Wednesday?

a smiling woman sits at her computer at home with a coffee alongside her, as if pleased with her investments.a smiling woman sits at her computer at home with a coffee alongside her, as if pleased with her investments.

The Sezzle Inc (ASX: SZL) share price is up 7.55% at lunchtime on Wednesday, with fellow buy now, pay later (BNPL) player Zip Co Ltd (ASX: ZIP) also up by 9.02%.

Other ASX BNPL shares are also well into the green today, including Splitit Ltd (ASX: SPT) up 12.77%.

There’s been new momentum in the BNPL space in recent weeks. The Sezzle share price is up — wait for it — 256% over the past month. The Zip share price has gained 175% over the same timeframe. Splitit shares are up 92%, Block Inc CDI (ASX: SQ2) is up 31.64%, and Humm Group Ltd (ASX: HUM) is up 15%.

What’s the sizzle on the Sezzle share price?

There is some price-sensitive news out of Sezzle today with a revolving credit facility amendment.

However, the lift in the Sezzle share price likely has nothing to do with this announcement. It simply appears to be a case of the BNPL sector coming back.

To recap, FY22 was the year from hell for BNPL shareholders. As my Fool colleague Brooke reports, some BNPL shares tumbled more than 90%.

Among the elements messing things up for BNPL shareholders were new competition, and concerns that rising inflation and interest rates could curb people’s spending and, thus, their use of BNPL services.

The Commonwealth Bank of Australia (ASX: CBA) launched its StepPay offering and National Australia Bank Ltd (ASX: NAB) launched NAB Now Pay Later. News that Apple Inc may soon launch its Apple Pay Later offering in addition to PayPal Holdings Inc scrapping its late fees also hurt ASX BNPL share prices.

Zip also canned its proposed takeover of Sezzle in early July “in light of current macroeconomic and market conditions”.

Are BNPL shares back in vogue?

So what’s changed? It’s still unclear. Just last week, the Sezzle share price exploded before the ASX called time out to ask the company if it knew why.

In its response, Sezzle said it believes “investors led the increase in trading activity, because of the sector having been significantly down in recent weeks”.

So, maybe it’s just a simple case of investors deciding BNPL shares are too cheap to ignore now.

Plus, there’s been some good news from the main BNPL players recently.

Sezzle shares soared last Friday after the company released its FY22 Q2 update. Sezzle told the market it expects to become profitable in the next six months, which is a huge deal.

Previously, Zip also released a pleasing quarterly update.

The post Why is the Sezzle share price surging 8% on Wednesday? appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of July 7 2022

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);

More reading

Motley Fool contributor Bronwyn Allen has positions in ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended Humm Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/DCF8NtY

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s