SZL (ASX) Ann: Conversion of CDIs into Shares of Common Stock

Originally posted by Chilli Down: ↑

Dear SZL Colleagues,

Try asking [email protected]

as per email below, They said they would not disclose the quantity of common shares required to be listed on the Nasdaq.

I sent the following email (twice, and note my email method is "I only ask 1 question at a time")
Sent: Thursday, August 24, 2023 8:23 AM
To: '[email protected]' <[email protected]>
Cc: [email protected]; [email protected]
Subject: If every SZL CDI is converted to common stock (SEZL)
Dear Investor relations / Lee Bradling,
If every CDI (on the ASX) is converted to common stock, will that satisfy the Nasdaq Stock Market to lift the trading halt in SEZL shares.

This was the reply
From: Investor Relations Sent: Friday, August 25, 2023 10:59 PM
Cc: [email protected]; [email protected]

Hello xxxxxx,
We are working with the Nasdaq to have the halt lifted as soon as possible. As we have disclosed, there was a lack of publicly available shares to trade on the Nasdaq to create adequate liquidity for trading. Therefore, we have put out releases providing guidance to investors on how to convert their CDIs into common shares that can be traded on the Nasdaq. Your question asks if all CDIs are needed to be converted - No. In terms of the quantity of shares required, we have not disclosed that but it is something we are working with the Nasdaq on daily.

Sezzle IR Team @sezzle.com>

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Hey Chili, I reckon their response is truthful and it's probably not so much about a defined figure they have to hit re public shares but probably more about making sure there won't be a repeat of the (lack of) trading on the day when Sezzle opened. By this I mean they probably need to prove there will be a degree of control of the price and trading - maybe by a mix of employing some market makers and perhaps some control of supply somehow in addition to getting that public number of shares higher. Adequate liquidity may still not exist in practice with just publicly available shares becoming available. i.e. I have converted some of my shares which makes them publicly available but I aint selling!

Overall I reckon Nasdaq want to prevent the old pump and dump scenario which is no good for those stuck in it, no good for Nasdaq and no good for the company either. The issue now is whether the price will drop when it relists? Imo a price of USD81 can be maintained believe it or not. Sezzle is growing, profitable (just) and got 5.68m shares on issue @81 = mc of 460. This implies a forward revenue multiple of a smidge over 3 - based on annualized July figures (12.5m). Check Affirm, much larger but the closest Nasdaq peer, which has a market cap of 5.2b and an ev/revenue ratio of 5.35. It's a quick and dirty calc but gives you a ball-park comparison. https://finance.yahoo.com/quote/AFRM/key-statistics?p=AFRM