The Sezzle Inc (ASX: SZL) share price has sunk further on Wednesday, closing 13.5% down at 32 cents apiece.
The drop marks a horrendous performance from Sezzle with the company's share price collapsing more than 96% over the past 12 months and 89% this year to date.
It's lost 55.6% in the last month alone.
In broader sector moves, the S&P/ASX All Technology Index (ASX: XTX) slipped a further 3.58% into the red on Wednesday.
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What's up with the Sezzle share price?
Investors have punished Sezzle this year to date amid a wave of macroeconomic pressures that directly impact the buy now pay later (BNPL) space.
The combination of surging inflation and spiking interest rates is indeed a bitter dish for the sector. It can push bad debts higher and companies have to make provisions for these, hurting their income.
These factors also impact consumer demand. Surging inflation pushes prices higher, whilst interest rates drive interest payments in the same direction.
Both have a destructive effect on disposable income and, potentially, aggregate demand.
One fund manager summed it up, saying "The bad debt experience is horrendous." East72 Fund Manager Andrew Brown told The Age:
The simple fact of life is this: BNPL business as a stand-alone means that you are going to attract a large number of people who are incapable of paying their money back, particularly if you don't have robust credit checks.
In a world where the cost of debt is rising, these are imminent signs for the sector.
Competition is also rising in the sector after Apple announced it might embed a BNPL update into its store.
The broader market sell-off is undoubtedly punishing Sezzle's share price this week as well.
