Buy now, pay later company Sezzle saw its stock leap by more than 20 per cent after the beleaguered loans company achieved profitability for the second month in a row, reversing a horror run of losses.
Sezzle’s revenue for December increased 15.7 per cent on the prior year, and 1.7 per cent on November, to reach A$19.9 million.
Net income for the fourth quarter of 2022 was A$715,600 compared to a net loss of $37 million in the same quarter of 2021.
Sezzle says it does not foresee any near-term capital needs due to its “strong liquidity position and operational performance”.
Sezzle is now up 58.5 per cent in 2023, after shedding 90 per cent of value during 2022.
A planned merger with Zip was scuppered in July, after a market slump saw the value of both companies come crashing down.
When Zip announced the acquisition on February 28, 2022, it valued Sezzle at US$491 million (A$728 million), based on adding a 22 per cent premium to its share price of $1.78.
Zip’s share price was $2.25 at the time.
By July, Zip traded for 50c a share, while Sezzle sold for 42c, having fallen 86 and 87 per cent, respectively, in the priorsix months.
While Sezzle may have reversed its fortune in the short term, the entire buy now pay later industry is on shaky ground, as regulators around the world seek to impose harsher lending restrictions for the sector.
