Shares of CURO Group Holdings (CURO 5.56%) are down 13% as of 12:50 p.m. EST on Monday. But holders of the stock probably aren't complaining after the stock soared almost 90% in Friday's session.
CURO is a provider of short-term loans to non-prime, underbanked consumers, and owns approximately 40% of financial technology (fintech) company Katapult Holding. The news on Friday that drove up CURO shares was a merger announcement that will bring Katapult public.
Special purpose acquisition company (SPAC) FinServ Acquisition (FSRV) will be merging with Katapult to create a newly public company that will trade on the Nasdaq under the symbol KPLT during the first half of 2021.
Katapult is an e-commerce company that gives non-prime borrowers lease-to-purchase options and appropriate payment plans. In the merger announcement, Katapult director Brian Hirsch described its technology platform as "a seamless digital experience for both consumers and merchants, [bringing] ease of use and quick integration, and sophisticated risk modeling."
Katapult expects 2020 revenue of about $250 million, representing about 172% growth versus the prior year period. The merger showcases a major investment success for CURO and its shareholders. The transaction will bring $365 million to CURO in the form of cash and stock, based on its ownership stake. CURO's total cash investment to date in Katapult has been $27.5 million.
Today's drop likely just comes from some CURO shareholders doing a victory lap and taking profits.