The Splitit Ltd (ASX: SPT) share price is down 4% to 59.5 cents this morning after the buy now, pay later start-up revealed it had signed up just 72 new retailers over the quarter ending June 30, 2019, which is at least an improvement on the 57 added over the March quarter.
In fairness it does report that it currently has more than 700 merchants in the "sales cycle", but if it keeps adding only around 72 merchants a quarter it would take around 115 years before it caught up to Afterpay's (ASX: APT) latest reported market share of around 33,900 merchants.
I'm all for long-term investing, but Splitit's growth rates need to accelerate if it wants credibility in the buy now, pay later space.
Notably, Splitit shares went from a 20 cents IPO price to $2 in just a matter of six weeks in early 2019 before crashing back to earth at 59.5 cents today. I expect the crazy rise and fall represents wild retail investor and momentum trader enthusiasm for the business meeting IPO holder selling to take the shares back to where they're today.
This is a nice segway to buy now, pay later rival Sezzle Ltd (ASX: SZL) which IPO'd yesterday by offering 35.7 million CDIs worth $43.7 million to select insiders at $1.22 per share.
Notably, Sezzle is a U.S. incorporated and operating business with no real connection to Australia other than the evangelical fervour of some punters for anything in the buy now, pay later space.
Sezzle posted just US$2.1 million in merchant fees (as a proxy for revenue) on 429,898 active customers or 5,048 active merchants as at June 30, 2019.
The stock has already more than doubled in one day to $2.68 on a market value of $517 million and call me a cynic, but I expect its shares may follow the similar vertiginous rise and precipitous fall trajectory of Splitit.
Overall, I wouldn't suggest taking a punt on Splitit or Sezzle shares.
