The Sezzle Inc (ASX: SZL) share price is back from a trading halt and having a very tough time.
In morning trade, the ASX share is crashing 27% to $11.75.
Why is this ASX share crashing?
Investors have been heading to the exits in their droves this morning after the buy now pay later (BNPL) provider announced its intention to delist from the Australian share market.
According to the release, the company has submitted a formal application to the Australian Securities Exchange (ASX) for its removal from the official list under ASX Listing Rule 17.11.
Subject to ASX approval, Sezzle expects that trading in the company's CHESS depository interests (CDIs) will be suspended on the ASX on or around the close of trading on 12 January 2024. After which, they will leave the ASX boards forever a couple of business days later on 16 January.
Shareholders have a couple of options before then. They can sell their shares on the ASX before the suspension or convert them to securities traded on the NASDAQ. Doing nothing will result in option two automatically happening.
Judging by the way the ASX share is crashing today, it seems that a lot of investors have opted for option one.
Why is Sezzle waving goodbye to the ASX?
Sezzle has named a number of reasons why it plans to leave Australia at the start of next year.
The first is that its listing on the NASDAQ is considered to be its primary listing now. It explains:
Primary listing is not in Australia: the primary purpose of the Company's listing on the NASDAQ was to move the Company's primary listing to the NASDAQ and give the Company access to what the Board considers to be a more attractive equity market for the Company, which improves the potential for further international investor interest.
It also highlights that the majority of its investor base is in the United States. It said:
Geographic considerations and ownership: a majority of the Company's securityholders are based in the United States. Further, the Company notes that the Company's 20 largest securityholders hold a combined total of 59% of the Company's issued capital, of which Australian securityholders represent less than 7%.
Another reason that has been noted is the low liquidity of Sezzle shares on the ASX. While today's crash means there's a high volume, this isn't usually the case. For example, a week ago, just 3,973 shares changed hands. It commented:
Low liquidity: there is a relatively low average daily trading volume in the Company's CDIs on the ASX. The Board considers there is a risk that low levels of trading activity can cause securities price volatility and makes an assessment of the value of the Company's securities difficult. The Company also believes that the current dual listing of the Company's securities on the ASX and the NASDAQ reduces the trading volume on the NASDAQ, and as a result of the delisting, the Company's trading volume on the NASDAQ may increase and provide better liquidity to all of the Company's securityholders.
