Zip earns reprieve as deal with Sezzle comes apart at the seams

Zip shares soared after it called off a deal with struggling US-focused Sezzle, but concerns remain for the buy now, pay later minnows as consolidation falls out of favour.

Ayesha de KretserSenior reporter

Updated Jul 12, 2022 – 5.30pm, first published at 10.04am

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A merger between struggling buy now, pay later companies Zip and Sezzle has been called off after a savage reassessment of the sector’s growth model, leaving investors questioning the future for junior, United States-focused partner Sezzle.

Zip shares bounced 6 per cent to close at 53¢ on Tuesday as investors breathed a sigh of relief, while Sezzle shares lost 38.55 per cent to close at a record low of 25.5¢, extending Monday’s 11.7 per cent decline.

Ayesha de Kretser is a senior reporter with The Australian Financial Review covering the aviation and tourism sectors. She has previously reported on banking, mining and commodity markets.