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2022-02-28
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Zip (ASX:Z1P) Share Price Halted after Announcing Results, Capital Raising, and Sezzle Acquisition
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Due to a significant jump in its cost of sales, Zip reported a 23% decline in gross profit to $59.1 million and a loss after tax of $214.3 million.</p><p>Zip share price halted</p><p>Given that Zip’s results have been pre-released, the main focus for investors is likely to be the Zip share price being a trading halt.</p><p>This morning the company requested a halt so it could undertake a $198.7 million capital raising. This comprises a fully underwritten institutional placement to raise $148.7 million and a $50 million share purchase plan.</p><p>Zip is raising the funds at $1.90 per share, which represents a 14% discount to the Zip share price at the close of play on Friday.</p><p>Why is it raising funds?</p><p>Zip has launched its capital raising after announcing an agreement to acquire rival BNPL provider <b>Sezzle Inc</b>(ASX: SZL).</p><p>And while the funds won’t be used to acquire Sezzle, management intends to use the additional capital to support its growth and execute on the potential synergies from the transaction.</p><p>Sezzle acquisition</p><p>Zip has signed an agreement to acquire Sezzle for a consideration of 0.98 Zip shares for every share Sezzle share.</p><p>Based on the current Zip share price of $2.21, this implies a price of $2.1658 per Sezzle share, which represents a premium of almost 22%. It also values Sezzle at approximately $491 million.</p><p>Zip’s Co-Founder and Global CEO, Larry Diamond, commented: “We are delighted to be bringing Zip and Sezzle together under a transformational transaction that is expected to deliver immediate scale and enhanced growth, which will support our path to profitability. Combining with Sezzle positions us as a leading global BNPL provider and prioritizes our ability to win in the important U.S. market,”</p><p>“Pete and I have known Charlie [Youakim] and Paul [Paradis] (cofounders of Sezzle) for some time, and we’ve been impressed by what the Sezzle team has achieved. Their responsible lending, their Sezzle Up credit builder program, as well as their B Corp certification is to be admired. We’re excited to welcome the entire Sezzle team on our journey, as we continue our mission towards being the first payment choice, everywhere and every day,” he added.</p><p>Subject to approvals, Zip expects the transaction to complete by the end of the third quarter of calendar year 2022.</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Zip (ASX:Z1P) Share Price Halted after Announcing Results, Capital Raising, and Sezzle Acquisition</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nZip (ASX:Z1P) Share Price Halted after Announcing Results, Capital Raising, and Sezzle Acquisition\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-02-28 10:29 GMT+8 <a href=https://www.fool.com.au/2022/02/28/zip-asxz1p-share-price-halted-after-annoucning-results-capital-raising-and-sezzle-acquisition/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Key pointsThe Zip Co Ltd(ASX: Z1P)share price won’t be going anywhere today.This morning the buy now pay later (BNPL) provider released its half year results and requested a trading halt.Zip share ...</p>\n\n<a href=\"https://www.fool.com.au/2022/02/28/zip-asxz1p-share-price-halted-after-annoucning-results-capital-raising-and-sezzle-acquisition/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.fool.com.au/2022/02/28/zip-asxz1p-share-price-halted-after-annoucning-results-capital-raising-and-sezzle-acquisition/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1199380932","content_text":"Key pointsThe Zip Co Ltd(ASX: Z1P)share price won’t be going anywhere today.This morning the buy now pay later (BNPL) provider released its half year results and requested a trading halt.Zip share price halted amid capital raisingTransaction volumes up 92% over the prior corresponding period to a record $4.5 billionTransaction numbers up 147% to a record of 36.3 millionRevenue up 89% to $302.2 millionCost of sales up 192.5% to $242.2 millionGross profit down 23.2% to $59.1 millionLoss before tax of $214.2 millionWhat happened during the first half?In line with its pre-released half year results, Zip delivered a 92% increase in transaction volume to $4.5 billion and an 89% lift in revenue to $302.2 million.Management revealed that this was driven by growth across all geographies, underpinned by customers continuing to benefit from products such as Tap and Zip, and deepening engagement through initiatives such as Zip’s personalized rewards offering.As per its previous update, things were not quite as positive for its earnings. Due to a significant jump in its cost of sales, Zip reported a 23% decline in gross profit to $59.1 million and a loss after tax of $214.3 million.Zip share price haltedGiven that Zip’s results have been pre-released, the main focus for investors is likely to be the Zip share price being a trading halt.This morning the company requested a halt so it could undertake a $198.7 million capital raising. This comprises a fully underwritten institutional placement to raise $148.7 million and a $50 million share purchase plan.Zip is raising the funds at $1.90 per share, which represents a 14% discount to the Zip share price at the close of play on Friday.Why is it raising funds?Zip has launched its capital raising after announcing an agreement to acquire rival BNPL provider Sezzle Inc(ASX: SZL).And while the funds won’t be used to acquire Sezzle, management intends to use the additional capital to support its growth and execute on the potential synergies from the transaction.Sezzle acquisitionZip has signed an agreement to acquire Sezzle for a consideration of 0.98 Zip shares for every share Sezzle share.Based on the current Zip share price of $2.21, this implies a price of $2.1658 per Sezzle share, which represents a premium of almost 22%. It also values Sezzle at approximately $491 million.Zip’s Co-Founder and Global CEO, Larry Diamond, commented: “We are delighted to be bringing Zip and Sezzle together under a transformational transaction that is expected to deliver immediate scale and enhanced growth, which will support our path to profitability. Combining with Sezzle positions us as a leading global BNPL provider and prioritizes our ability to win in the important U.S. market,”“Pete and I have known Charlie [Youakim] and Paul [Paradis] (cofounders of Sezzle) for some time, and we’ve been impressed by what the Sezzle team has achieved. Their responsible lending, their Sezzle Up credit builder program, as well as their B Corp certification is to be admired. We’re excited to welcome the entire Sezzle team on our journey, as we continue our mission towards being the first payment choice, everywhere and every day,” he added.Subject to approvals, Zip expects the transaction to complete by the end of the third quarter of calendar year 2022.","news_type":1},"isVote":1,"tweetType":1,"viewCount":1070,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"CN","currentLanguage":"CN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":1,"xxTargetLangEnum":"ZH_CN"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/636566846"}
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