The Sezzle Inc (ASX:SZL) share price is having a terrible start to the week, down more than 5% today. Here’s why this BNPL company is down
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The Sezzle Inc (ASX: SZL) share price is not having a fun start to the week today. Sezzle shares are, at the time of writing, down a nasty 5.63% to $7.55 a share.
That still puts the Sezzle share price in the green for 2021 so far, by a healthy 20% in fact. But it also puts it down by around 35% from the highs we saw back in mid-February.
So what’s behind this decisive move downwards for Sezzle today?
Sezzle share price fails to sizzle
Well, today’s Sezzle share price moves are not the result of any official news out of the company. That much we know for sure. The last major announcement Sezzle made to the markets was its FY2020 earnings results back on 26 February. There have been some housekeeping announcements since, but nothing that would conceivably result in today’s moves.
Instead, it looks as though the entire buy now, pay later (BNPL) sector is selling off today. Sezzle’s BNPL brethren Afterpay Ltd (ASX: APT) and (to a lesser extent) Zip Co Ltd (ASX: Z1P) have both sold off today in the face of a rising S&P/ASX 200 Index (ASX: XJO). At the time of writing, Afterpay is down 4.2%, while Zip has shed 1.16%.
This is nothing new though. BNPL shares like Afterpay, Zip and Sezzle have been in the wringer for a while now. This space looks to be taking the brunt of investors’ newfound distaste of highly-valued ASX tech shares as a result of rising bond yields across both the United States and Australia.
Further, as we reported last week, competition in the BNPL space is also heating up. For one, we have the better side of a dozen BNPL companies on the ASX offering very similar services.
For another, we are also seeing US payment giants like PayPal Holdings Inc (NASDAQ: PYPL), American Express Company (NYSE: AXP), Mastercard Inc (NYSE: MA) and Visa Inc (NYSE: V) all dipping their respective toes into BNPL products and offerings.
These companies are massive and truly global. For example, Afterpay, by far the ASX’s largest BNPL provider, has a market capitalisation of $31.14 billion on current pricing. Visa is a ~US$480 billion ($618.5 billion) behemoth by comparison.
But remember, although the falls in the BNPL space look dramatic, they do come off the back of what has been a fantastic year (or more) for these companies. Yes, Sezzle is down 35% from its highs. But it is also still up more than 300% from its pre-COVID high.
On the current Sezzle share price, the company has a market cap of $771.77 million.
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Sebastian Bowen owns shares of American Express, Mastercard, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Mastercard, PayPal Holdings, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Mastercard, PayPal Holdings, and Sezzle Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.