Sezzle shares plunge another 16%, now down 60% in a week

It’s going from bad to worse for the Sezzle Inc (ASX: SZL) share price this Wednesday. Sezzle shares have collapsed by another 15.7% so far this Wednesday and are now trading at 22 cents a share. That’s despite the All Ordinaries Index (ASX: XAO) having a day of mild gains so far today.

This latest plunge now puts the Sezzle share price down a painful 59.8% over the past five trading days alone. Yet, a week ago, Sezzle shares were over 50 cents each, a far cry from the 22 cents we see today (a new all-time low). Sezzle is now down a devastating 92.95% in 2022 thus far and more than 98% down from the all-time high of over $11 a share that we saw back in 2020.

So what on earth is going on with the Sezzle share price to elicit such a savage selloff from the market?

Why have Sezzle shares fallen another 16% today?

Well, it appears that it was the news we heard yesterday that is continuing to punish the Sezzle share price today. Yesterday, we learned that the deal between Sezzle and its fellow buy now, pay later (BNPL) share Zip Co Ltd (ASX: ZIP) has collapsed.

This deal, first gazetted back in February, would have seen Zip acquire Sezzle in full. It was to be an all-scrip deal worth almost $500 million at the time. This would have seen Sezzle shareholders receive 0.98 Zip shares for every Sezzle share owned.

However, both the Sezzle and Zip share prices have been in freefall ever since the deal was announced. As such, it had become increasingly clear that it would be difficult to implement on its original terms.

This all came to a head yesterday when both companies announced that the deal was off. Zip shares have responded very positively, up more than 7% since the deal was announced. But it has been Sezzle that has copped the worst of ASX investors’ disappointment.

So it’s likely that it is the continuing fallout from this merger deal falling through that is behind the savage day Sezzle shares have copped this Wednesday.

At the current Sezzle share price, this ASX BNPL share has a market capitalisation of $45 million.

The post Sezzle shares plunge another 16%, now down 60% in a week appeared first on The Motley Fool Australia.

(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(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here’s a look at the 5 best ASX All Ords tech shares in FY22
• ASX 200 midday update: ANZ confirms MYOB talks, energy shares fall
• Are falling BNPL shares pushing the ASX banks higher today?
• Outlook for Zip share price ‘uncertain’ following scrapped merger: UBS
• Why Allkem, Kogan, Metcash, and Sezzle shares are sinking

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. 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/ZJ0IQlq