Shares in US-based, buy now pay later fintech Sezzle (ASX:SZL) had exploded today, up more than 20% in the first hour of trade after the company raised $80 million in an institutional placement.
Sezzle shares exploded out of the blocks from $6.95 last Thursday before trade was suspended pending the raise, to climb as high as $8.84 briefly before sitting at around $8.50 going into lunch.
On Friday Sezzle announced it was raising A$86.3 million (US$60m) – $79.1 million institutional placement, confirmed this morning at at $5.30 a share, plus A$7.2 million (US$5 million) in a share Security Purchase Plan that begins on Friday. Combined, they represent 8.9% of the company’s existing issued capital.
Sezzle’s share price jumped more than 40% last Thursday before the ASX called a trading halt following a media speculation of the raise
The $5.3- placement price is 23.7% discount to the last traded price of $6.95; but and a 3% premium to the 10-day VWAP of $5.14. Those share don’t begin trading until Thursday.
Sezzle shares fell to a low of 37 cents on March 23 before launching a meteoric recovery.
In contrast, Afterpay’s barnstorming share price has been sliding in morning trade on Monday, down more than 3% to $70.
BNPL fintechs have been among the star performers during the covid-19 pandemic although most analysts struggle to find value now in the stocks.
EDITOR’S NOTE: Sezzle closed the day up 22% at $8.50 with a rally in the last 30 minutes of trade that saw the fintech’s share price rise from $8 at 3.30pm. Afterpay finished the day down slightly at $71.74.