San Francisco, California–(Newsfile Corp. – January 1, 2025) – Sezzle Inc. (NASDAQ:SEZL)BNPL, a buy-now-pay-later company, lost nearly a quarter of its market value on December 18 following a damning report from an activist short-seller. Hindenburg ResearchAlleging that Sezzle had engaged in risky lending practices.
Equity firm Hagens Berman has opened an investigation into the allegations to determine whether Sezzle violated U.S. securities laws and is urging investors in Sezzle who bought and suffered significant losses to file their losses now.
Visit: www.hbsslaw.com/investor-fraud/sezl
Contact the company now: SEZL@hbsslaw.com
844-916-0895
Investigation of Sezzle Inc. (SEZL):
The investigation focuses on the sustainability of Sezzle's business model.
Sezzle offers financing options that allow consumers to make purchases and pay for them over time, usually in a series of installments. Sezzle has benefited from the wave of BNPL popularity over the past year, as rising inflation forced shoppers to look for new and innovative financing options. This sent Sezzle's shares soaring, rising more than 1,000% along with soaring business sales.
But on December 18, a famous short seller… Hindenburg It raised serious questions about the sustainability of Sezzle's business model. Hindenburg It indicates that Sezzle is drawing against a line of credit with exorbitant annual interest rates of more than 12% to fund subprime loans to high-risk borrowers who are unable to obtain credit cards or access other regular forms of financing.
Furthermore, the report questions the sustainability of Sezzle's business partnerships. Hindenburg It claims that key partnerships, such as those with goal (NYSE:), did not materialize as expected. According to the report, the company's number of active traders has also decreased significantly, raising doubts about its long-term growth prospects. To make matters even more serious, Sezzle's Chairman and CEO pledged $542 million worth of stock as collateral for a margin loan, representing about 30% of the company's total equity.
The report claims that Sezzle's customer base has also shrunk, with a 20% decline in active customers since 2021. Despite this decline, the company has recorded significant growth in its subscription products. Hindenburg It alleges that Sezzle may be artificially inflating its subscription numbers through questionable sign-up practices.
The report also highlights the significant rise in consumer complaints against Sezzle.
Hindenburg It suggests insiders realize Sezzle is a ticking time bomb, as insiders have sold nearly $71 million worth of stock this year, including a major pre-IPO investor who cut his stake by 87%.
“If Hindenburg's allegations are proven, they could mean that the company misled investors about its business model,” said Reed Katherine, the Hagens Berman partner leading the investigation.
If you invested in Sezzle and suffered significant losses, or have knowledge that may assist in the company's investigations, submit your losses now »
If you would like more information and answers to frequently asked questions about the Sezzle investigation, read more »
Whistleblowers: Persons with non-public information regarding Sezzle should consider their options to assist in the investigation or take advantage of the SEC's whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Catherine Reed at 844-916-0895 Or send an email to SEZL@hbsslaw.com.
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About Hagens Berman
Hagens Berman is a global, complex plaintiffs' rights litigation firm focused on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases that achieve real results for those harmed by corporate negligence and other wrongdoing. The Hagens Berman team has earned more than $2.9 billion in this area of law. More about the company and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
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