As the ASX BNPL giants are reeling, shares in Splitit appear to be somewhat dodging the carnage.
The post Why isn’t the Splitit (ASX:SPT) share price tumbling as much as other BNPL shares? appeared first on The Motley Fool Australia. –
The Splitit Ltd (ASX: SPT) share price isn’t having a great day today. That is unless you compare its falls to those of other ASX BNPL (buy now, pay later) shares such as Afterpay Ltd (ASX: APT) or Zip Co Ltd (ASX: Z1P).
Right now, Splitit shares have fallen 3.6% today to trade at 54 cents.
But that pales when compared with the fact that Afterpay and Zip shares are both currently down by around 10% following news of Apple Inc‘s foray into the BNPL sector. Additionally, Paypal Holdings Inc has released some news that’s likely impacting ASX BNPL shares today.
Yet somehow, the Splitit share price appears to be getting away comparatively unscathed.
Big boys hit the sector
Today, news Apple is creating its own BNPL offering has hit the market.
The tech giant is reportedly teaming up with Goldman Sachs to create the service, which will follow the traditional BNPL format of 4 payments over 8 weeks or several months.
The two renowned companies have shaken up the sector, and most ASX BNPL shares are seeing their values plummet.
So why is the Splitit share price not suffering to quite the same extent as some of its counterparts?
What’s going on with Splitit?
Perhaps, the better-than-expected day for the Splitit share price could have something to do with its previous misfortunes.
Zip and Sezzle Inc (ASX: SZL) shares have gained 33% and 28% respectively year to date, while the Afterpay share price has fallen by around 10%.
On the other hand, the Splitit share price has plunged almost 59% year to date. Perhaps some investors are feeling this particular BNPL share has already been sufficiently sold off.
Additionally, Splitit may be faring somewhat better than its cohort due to its smaller market capitalisation. The company’s $260 million market cap is significantly less than Afterpay, Zip and Sezzle, which are all currently valued in the billions.
Also worth noting, is the fact that Splitit’s business model isn’t a traditional BNPL service. Unlike other BNPL services, which pay for an item up front and charge customers in instalments, Splitit allows its users to pay using their own credit or debit cards.
Splitit holds the remaining balance of a purchase on the card used in the transaction. Therefore, if a customer fails to pay, it simply charges the card.
Splitit share price snapshot
Despite today’s falls not being as bad as they could be, they are still unwelcome news for Splitit shareholders.
The Splitit share price has now fallen more than 66% in 12 months. It has also dropped by around 15% in the last 30 days alone.
Should you invest $1,000 in Splitit right now?
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Apple, PayPal Holdings, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Apple and PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.