• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Fat Tail Daily

Investment Ideas From the Edge of the Bell Curve

  • Menu
    • Commodities
      • Resources and Mining
      • Copper
      • Gold
      • Iron Ore
      • Lithium
      • Silver
      • Graphite
      • Rare Earths
    • Technology
      • AI
      • Bitcoin
      • Cryptocurrency
      • Energy
      • Financial Technology
      • Bio Technology
    • Market Analysis
      • Latest ASX News
      • Dividend Shares
      • ETFs
      • Stocks and Bonds
    • Macro
      • Australian Economy
      • Central Banks
      • World Markets
    • Small Caps
    • More
      • Investment Guides
      • Premium Research
      • Editors
      • About
      • Contact Us
  • Latest
  • Fat Tail Series
  • About Us
Market Analysis Latest ASX News

Humm Group [ASX:HUM] Shares Dive 20% on Axed Latitude BNPL Deal

Like 0

By Kiryll Prakapenka, Friday, 17 June 2022

Humm Group [ASX:HUM] shares fell 20% on Friday after Humm and Latitude Group Holdings [ASX:LFS] terminated their BNPL sale agreement.

Humm Group [ASX:HUM] shares fell 20% on Friday after Humm and Latitude Group Holdings [ASX:LFS] terminated their BNPL sale agreement.

After months of speculation, Latitude’s proposed acquisition of Humm’s BNPL business has been scrapped.

Humm shareholders didn’t take too kindly to the announcement. HUM shares fell as much as 24% on Friday, with the fintech stock now down 55% in the past 12 months.

As for Latitude, its shares were down a comparatively modest 4% on Friday, with the LFS stock down 40% in the last 12 months:

Source: TradingView.com

Humm and Latitude call off BNPL deal

Latitude’s $250 million proposal to acquire Humm’s Consumer Finance (HCF) segment has been called off.

LFS and HUM announced on Friday that the termination was a mutual decision, citing the ‘current major disruption in financial markets’.

The announcement comes less than a week before a scheduled scheme of arrangement meeting to ratify the deal.

In a terse comment, Humm stated:

‘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.’

Latitude’s comment was equally terse, with Latitude seeking to downplay any negative repercussions from the scuppered deal:

‘BNPL represents less than 1% of Latitude’s revenue and receivables.

‘Latitude Group is experiencing good organic volume growth, is profitable and well capitalised to execute on a number of opportunities ahead.’

The scrapping of the deal comes after several statements made by Andrew Abercrombie, the Director of Humm and one of its largest shareholders.

On 18 May, Abercrombie expressed that the proposed Latitude deal undervalued Humm’s HCF segment.

Humm Chair Christine Christian recently addressed Abercrombie’s public statements regarding the HCF sale, saying:

‘The Majority Directors believe that several of those statements are misleading and that therefore it is vital that Humm shareholders are provided with the facts.’

She then went on to make a prescient comment:

‘There is a material risk that Humm’s share price will fall significantly if the HCF Sale is not approved by Humm shareholders at next week’s General Meeting.

‘The Majority Directors also believe that the strong performance of Humm’s Commercial business could be negatively impacted if the HCF Sale does not proceed.

‘The stakes here are extremely high and Humm shareholders deserve the facts in order to make an informed decision about how to vote at next week’s General Meeting.’

HUM share price outlook — a tough climate for BNPL stocks

With the deal scrapped, Humm is now saddled with an unprofitable BNPL segment at a time when investors are running away from the sector.

Some of Humm’s BNPL rivals are down over 85% in the past 12 months.

With Latitude now walking away, Humm has to decide what to do with its BNPL business, which it admitted was struggling lately.

This week, Humm provided a trading update on its HCF financial performance, acknowledging the segment ‘remains under significant pressure’.

Year to date, the segment’s cash net profit after tax (CNPAT) declined by around 61%.

Net receivables also decreased 3.6% between December and May this year, and net operating income was down about 10% on the same period last year.

Expenses had increased by 15%.

Humm noted:

‘The trading environment is very tough for HCF, with intense competition, rising interest rates, and weakening consumer sentiment.

‘HCF has experienced a reduction in net receivables, net yield compression and higher expenses.’

So what’s next for Humm?

Surely shareholders will expect more detail on what went wrong with the Latitude deal.

I expect more announcements from Humm regarding this in the coming weeks.

Now ASX BNPL stocks aren’t the only ones down this year.

In fact, the ASX Small Ordinaries is down more than 25% year-to-date, which means the small caps sector is technically in a bear market.

Increasing interest rates, persistent supply chain snarls, and recession fears are clearly weighing on sentiment.

But opportunities are still out there.

The key is knowing where to look.

Our small-cap expert, Callum Newman, has a strategy for picking out ‘left-for-dead’ stocks most likely to bounce back.

You can find out how he does it, ‘grave-dancer’ style, here.

Regards,

Kiryll Prakapenka,
For Money Morning

 

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

Kiryll Prakapenka

Kiryll’s Premium Subscriptions

Publication logo
Fat Tail Investment Research

Latest Articles

  • Australia ain’t the USA…and that’s great!
    By Callum Newman

    The outlook for Australia and the ASX are very different to the US and US shares. Here’s why…

  • The biggest infrastructure spending boom in history just kicked off
    By Nick Hubble

    Did governments screw up our gas supply? According to some sources in the industry, a rather similar thing happened to our electricity and water industry.

  • You Read it Here First: Great Asset Rotation Underway
    By James Cooper

    Media is swirling on the great asset transition taking place from the banks to the miners. But James Cooper made this prediction months ago in Mining Memo. Are you taking advantage?

Primary Sidebar

Latest Articles

  • Australia ain’t the USA…and that’s great!
  • The biggest infrastructure spending boom in history just kicked off
  • You Read it Here First: Great Asset Rotation Underway
  • The sector primed to fly into 2026
  • OpenAI and Microsoft Divorce?: Why this could be good for you

Footer

Fat Tail Daily Logo
YouTube
Facebook
x (formally twitter)
LinkedIn

About

Investment ideas from the edge of the bell curve.

Go beyond conventional investing strategies with unique ideas and actionable opportunities. Our expert editors deliver conviction-led insights to guide your financial journey.

Quick Links

Subscribe

About

FAQ

Terms and Conditions

Financial Services Guide

Privacy Policy

Get in Touch

Contact Us

Email: support@fattail.com.au

Phone: 1300 667 481

All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.

Fat Tail Logo

Fat Tail Daily is brought to you by the team at Fat Tail Investment Research

Copyright © 2025 Fat Tail Daily | ACN: 117 765 009 / ABN: 33 117 765 009 / ASFL: 323 988