Why the Splitit (ASX:SPT) share price is surging 7% today

There has been no market sensitive news today, thus far.

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green arrow representing a rise in the share price

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The Splitit Payments Ltd (ASX: SPT) share price has leapt into the green from market open today, hitting an intraday high of 52 cents.

There is no market sensitive news specific to Splitit today, so let’s have a look at what is behind today’s gains.

Fintech shares lift from Afterpay deal

US payments giant Square agreed to a pending proposal to buy payment services company Afterpay Ltd (ASX: APT) for $39 billion in an all-stock transaction today.

Afterpay shares soared on the news, bringing companies in the Australian payments services basket along for the ride.

This is not an uncommon phenomenon when there is a large deal like this on the table. The reason is that investors have a reasonable anchor point to put a valuation on companies in the same industry.

Splitit Payments is a “cross-border payment solution” that enables its customers to split purchases into monthly instalments.

Therefore it stands to reason that Splitit shares fall in the peer group of Afterpay, and are realising gains on the back of this momentum.

And Splitit shares are not the only benefactors to the momentum created by the Afterpay deal.

Other names in the Fintech domain like Zip Co Ltd (ASX: Z1P) climbed 15% higher from the open at one point, whereas IOUPay Ltd (ASX: IOU) also jumped 10%.

Splitit Payments share price snapshot

The Splitit Payments share price has had a difficult year to date, posting a loss of 62% since January 1.

This loss extends the previous 12 month’s decline of 64%, which has lagged the S&P / ASX 200 Index (ASX: XJO)’s return of around 23% over the same time.

In the past month alone, Splitit shares have slipped 20% into the red.

Should you invest $1,000 in Splitit Payments right now?

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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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