Sezzle trading halted by ASX after suspicious jump in price

Trading of a buy now, pay later company’s shares has been halted after stocks climbed by more than 100 per cent Wednesday.

Trading of buy now, pay later provider Sezzle’s shares has been halted by the ASX after prices surged by more than 100 per cent in just a few hours.

The “unusual” activity began about midday on Wednesday when it started its steep climb up from about 45 cents and “hit the afterburners” about 2.30pm, going from 55 cents to 79 cents.

Sezzle hadn’t been above 60 cents since May, leading to speculation something suspicious could be behind its sharp jump.

“It was a stunning rally and it has now got itself basically in trouble and issued a ‘please explain’ by the ASX 200,” market analyst Tony Sycamore from City Index said.

Mr Sycamore said the 20 cent jump of Zip, a competitor that abandoned a merger with Sezzle two weeks ago, could be an indicator of the industry’s slight recovery from its recent staggering decline in Australia.

The cause for a sharp jump in Sezzle shares has yet to be revealed. Picture: Getty Images

“I’m not sure if it’s a lifting of that glue which has surrounded the BNPL sector, or whether there is solid news,” Mr Sycamore told news.com.au.

He speculated there could be an announcement yet to be revealed that related to both Sezzle and Zip which had driven insiders to act.

“Something potentially may come out over the next day or so,” he said.

Such significant jumps, which occurred over about 45 minutes, typically alluded to insider knowledge, which explained the ASX 200’s fast reaction to pause trading.

“For a stock to move 100 per cent, there’s obviously something. It’s either a news-related event … or the other possibility is that there’s been a short covering rally,” Mr Sycamore said.

Sezzle was trading at $2.50 at the start of the year, a significant plunge from upwards of $9 in July last year.

On July 14 this year, stock was trading below 20 cents.

“It’s a huge, huge move in the grand scheme of things,” Mr Sycamore said.

Prior to Wednesday’s shocking jump, Sezzle had lost 98 per cent of its value.

Sezzle CEO Charlie Youakim. Picture: Bloomberg

“It’s been a huge destruction of wealth for shareholders … but someone’s been caught out today,” he said.

“Someone’s got a sniff of some more news coming out.”

Sezzle started the day at 34 cents and was put in a trading hold at 70 cents – more than 100 per cent higher in one day.

Moves of 10 or 20 per cent in the technology sector were not uncommon, but such a massive jump was highly unusual, Mr Sycamore said.

It’s expected the ASX will provide information surrounding the Sezzle halt to shareholders on Thursday.