The Sezzle Ltd (ASX: SZL) share price is off to the races as a public company to hit a high of $2.58 this lunchtime after the company dished out 35.7 million CDIs (equivalent to shares) to a select group of institutional investors and brokers' clients at $1.22 per share at the IPO stage.
The art of an IPO like this is to not undervalue the business on an initial basis, but leave enough upside room in the valuation to ensure some healthy stag profits for anyone in on the IPO.
It appears Sezzle's capital markets advisers and the company will be pleased with their work given they've now doubled their money in less than one day's trading.
That return actually looks pathetic though compared to the 10x surge of less credible buy now, pay later start-up Splitit Ltd (ASX: SPT).
It surged from a 2o cent IPO price to $2 in around 6 weeks in early 2019 despite having just 457 retailers signed up to its platform as at March 31 2o19. In total Splitit added just a net 57 retailers over the March quarter and the stock is now back at 63 cents.
These kind of growth stats are not going to have management at Afterpay Touch Group Ltd (ASX: APT) or Z1p Co. Ltd (ASX: Z1p) quaking in their boots either.
For its part, Sezzle reports it had 429,898 active customers on 5,048 active merchants that generated merchant fees (as a proxy for revenue) of just US$2.1 million as at June 30, 2019. For FY 2018 it made a net loss of US$4.2 million dollars.
At $2.58 it has a market value around $498 million according to ASX investors.
