Sezzle (ASX:SZL) shares soar 42% before entering trading halt

The Sezzle Inc (ASX: SZL) share price went through the roof today as investors clamoured to get their hands on the buy now, pay later (BNPL) provider’s shares. 

Sezzle shares finished the day 41.8% higher at $6.95 apiece, but this wasn’t before racing out to an intra-day high of $8.25 – a huge 68.4% jump.

This rise comes on the back of Sezzle’s June 2020 quarter update, which was released to the market on Tuesday and sent shares soaring 25% on the day.

In the update, Sezzle announced quarterly underlying merchant sales (UMS) of US$188 million, up 58% quarter-over-quarter, and 1.48 million active customers. 

Meanwhile, merchant fees rose 54.8% quarter-over-quarter to US$10.6 million, representing 5.6% of UMS.

Looking forward, the company expects to achieve an annualised run rate for UMS of more than US$1 billion by the end of 2020. For context, the company’s annualised run rate for UMS was around US$752 million ($188m multiplied by four quarters) in the June 2020 quarter.

Sezzle shares halted

Sezzle shares didn’t make it to the end of today’s session, with a pause in trading being announced at around 1pm which was soon followed by news of a trading halt.

As detailed in the ASX release, Sezzle has requested a trading halt as it seeks to undertake a “material capital raising”.

The trading halt will last until the earlier of the commencement of trading on Monday, 13 July 2020 or the release of an announcement in relation to the capital raising.

According to reporting in The Australian Financial Review, Sezzle is considering an $80 million raising with the help of broker Ord Minnett.

Sezzle will be following in the footsteps of rival Afterpay Ltd (ASX: APT), which announced an $800 million capital raising on Tuesday.

Just like Afterpay, Sezzle is set to raise capital at an opportune time, with its share price sitting at record highs. The ASX BNPL sector, in general, has been on a tear recently as COVID-19 accelerates the shift to online shopping.

After today’s big jump, Sezzle is now the best-performing ASX BNPL share in 2020 in terms of year-to-date share price returns. Here’s the lay of the land:

Closing price on 31 Dec 2019 Closing price on 23 March 2020 Current share price Share price gain year to date
Sezzle (ASX: SZL)

$2.09

$0.37

$6.95

233%

Afterpay (ASX: APT)

$29.28

$8.90

$73.50

151%

Splitit (ASX: SPT)

$0.66

$0.215

$1.57

138%

Openpay (ASX: OPY)

$1.25

$0.32

$2.80

124%

Zip (ASX: Z1P)

$3.54

$1.23

$6.70

89%

If you missed the boat on these ASX BNPL shares, take a look at the 3 leading growth stocks in the free report below.

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At the time of publishing, Cathryn owns shares of Afterpay.

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