Aussie BNPL stocks crash in 2022 as regulation hurdles, rate hikes bite

Openpay

28/12/2022 23:33

** ASX-listed buy now, pay later (BNPL) stocks have taken a
beating in 2022 due to reduced consumer spending, rising
interest rates, and heightened regulatory scrutiny
    ** After soaring in the first two years of the COVID-19
pandemic, shares have tumbled in 2022 as regulators globally
considered varying degrees of BNPL regulation to protect
consumers  urn:newsml:reuters.com:*:nL4N32L05Z
    ** In Australia, BNPL providers may be made to follow
responsible lending laws, including mandatory background checks
on borrowers
    ** In June, tech giant Apple Inc's  AAPL.O  planned entry in
the sector hammered existing players
    ** Trickier credit conditions among others raised the
prospect of consolidation in the sector
    ** Zip Co  ZIP.AX  in July dumped its buyout offer for
Sezzle  SZL.AX  citing it wanted to focus on its core business
amid soaring inflationary environment
    ** ZIP down 88.5% so far this year and on track to post its
worst ever yearly performance since listing in 2009
    ** U.S.-based Sezzle has lost 86.8%, and is set to post its
worst yearly performance since listing in 2019
    ** Local shares of Block Inc  SQ2.AX  have lost half of
their value since listing on Jan. 20
    ** Humm Group  HUM.AX , which has exposure to BNPL sector,
and Latitude Group  LFS.AX , both tumbled over 30% in 2022 - the
parties were in talks of consolidation via LFS' $235.97 million
offer to buy HUM, which fell through in June
    ** Smaller players such as Beforepay Group  B4P.AX  and
Openpay Group  OPY.AX  have also lost a large portion of their
value in 2022
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Aussie BNPL Stocks    https://tmsnrt.rs/3PZlMCG
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 (Reporting by Navya Mittal in Bengaluru)
 ((navya.mittal@thomsonreuters.com))