In morning trade, the Humm Group Ltd (ASX: HUM) share price has continued its slide.
At the time of writing, the financial services company's shares are down 11% to a new multi-year low of 51 cents.
This means the Humm share price is now down 31% this week.
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What's going on with the Humm share price?
Investors have been selling down the Humm share price today after the company revealed that the $250 million sale of its buy now pay later business to Latitude Group Holdings Ltd (ASX: LFS) has been terminated.
The Latitude share price is up slightly on the news in early trade.
According to the release, the two parties mutually agreed to terminate the proposed Humm Consumer Finance (HCF) transaction due to current major disruption in financial markets.
This is a big blow for Humm, which has been trying to offload the struggling business to focus on its profitable and positive performing Humm Commercial business.
In fact, yesterday Humm released a trading update and stated that HCF's performance remains under significant pressure. So much so, that at the end of May, the business had recorded a financial year to date cash net profit after tax decline of 61%.
While it was likely that Humm was highlighting this poor performance to gain support for its sale amid criticism from a major shareholder, it's possible that this raised a few eyebrows at Latitude.
In fact, reports yesterday suggested that Latitude could have been looking to back out from the deal for HCF due to its deteriorating performance. So, today's termination isn't a complete surprise.
This morning the Humm Board tried to save a bit of face by talking up the business again now that it is stuck with it. The release states:
The Board of Humm continues to believe that HCF is a high-quality business and intends to review HCF's strategic direction to focus on its core products and markets in order to restore profitability. The Board and Management remain excited about flexicommercial's prospects. Humm remains in a strongly capitalised position with surplus unrestricted cash and no drawn corporate debt.
