SZL - Sezzle Inc.

[System]

Sezzle is a technology-driven payments company based in the United States with the mission of financially empowering the next generation.

Sezzle provides a payments platform that facilitates fast, secure and easy payments between End-customers and retailers. Sezzle's payment product is a short-term, interest-free instalment plan that delivers to End-customers both a budgeting and financing value proposition.

It is anticipated that SZL will list on the ASX during July 2019.

https://sezzle.com

 

[Knobby22]

I read it is a clone of Afterpay and looking at how it works it appears extremely similar.

Initial funding was US. Why is it listing in Australia? Traders with them look a bit second tier at present.
Name is a bit weak and it's always harder to be no.2.
https://www.afr.com/technology/tech...s-rival-sezzle-to-list-on-asx-20190402-p51a0q

Anyone know much about the founders?

 

[bigdog]

Great start on ASX the stock closed 80 per cent above its $1.22 IPO price

ASX announcement July 30
30/07/2019 8:51:49 AM Sezzle lists on the ASX - Operational Update

 

[Dona Ferentes]

A spokesman from California’s Department of Business Oversight told AFR Weekend that although its decision to deny Sezzle a licence to issue loans in the state did not expose the company to fines or penalties, it reserved its rights to pursue the company via other avenues.

“The Department of Business Oversight is not precluded from doing so in additional actions, such as a desist and refrain order or a civil action for ancillary relief,” the spokesman said.

- and if it is a clone of Afterpay, I'd suspect the nimble upstarts are in for a tough time.

 

[Knobby22]

What is also interesting is the way this company rips off the consumer.

Unlike Afterpay which it says it is cloning, the company has massive charges and it's model seems to be to make money that way.

A truly cynical company riding on the coat tails of an innovator. It does not surprise that it's behaviour is morally suspect in more ways than one.

 

[verce]

I would wait and see what the company says on Monday. Until then, based on the recent AFR article we know that:

♦ No fines
♦ No penalties
♦ 15 days to appeal decision

And the company is still operating in Canada and the wider United States with its existing Afterpay style offering. It’s a bit of a storm in a teacup honestly.

https://themarketherald.com.au/sezzle-asxszl-faces-u-s-hurdle-with-rejected-lending-licence-2020-01/

However, the rejection of the lending licence does not stop Sezzle from operating in California. Rather, it stops the company from smoothing out operations by cutting out a middle-man.

Currently, the company explained, merchants will initiate sales contracts then assign those contracts to Sezzle in order for the company to service the payment processing. Under this model, Sezzle acts as a sales finance company and does not make loans.

Sezzle said in an announcement to the ASX today its goal is to remove these merchants from the financing process.

 

[frugal.rock]

A timely reminder that the IPO was for $1.22 (thanks Bigdog) and less than 6 months ago.
Might be a suitable retrace available after the dust settles... and after the knife catchers are all bloody and cursing
F.Rock

 

[Knobby22]

Yes, reading their latest announcement they argue they are not a lender and so have not broken the law.
I would want to see how this plays out.
There may be a large fine.

 

[Miner]

https://www.asx.com.au/asxpdf/20200103/pdf/44d15bjsxkpswc.pdf
I can smell rotten eggs here

 

[verce]

Yes, reading their latest announcement they argue they are not a lender and so have not broken the law.
I would want to see how this plays out.
There may be a large fine.

https://themarketherald.com.au/sezzle-asxszl-faces-u-s-hurdle-with-rejected-lending-licence-2020-01/

"The rejection of the lending licence does not stop Sezzle from operating in California. Rather, it stops the company from smoothing out operations by cutting out a middle-man."

According to the AFR weekend article:

♦ No fines
♦ No penalties
♦ 15 days to appeal decision

 

[Knobby22]

I read that article from the AFR yesterday.
Four paragraphs of interest:

A spokesman from ....that although it's decision to deny Sezzle a licence to issue loans in the state did not expose the company to fines or penalties, it reserved it's rights to pursue the company via other avenues.

The Department of Business Oversight is not precluded from doing so in additional actions, such as a resist and refrain order or a civil action for ancillary relief, the spokesman said.

(My comment civil action means court action, the USA loves this type of action, highest concentration of lawyers per head of population in the world.)

If a consumer uses Sezzle to finance a $35 purchase and was charged all fees provided under the user agreement, the consumer would have paid an equivalent annual percentage interest rate of 600%.

The regulator said Sezzle had been engaged in illegal unlicensed lending after it denied the company a licence which rival Afterpay had secured only seven weeks earlier, describing credit sales made by Sezzle's partners as "not bona fide".

 

[verce]

· Expanded receivables financing facility was just announced in December 2019 of USD 100 million – up from prior USD 30 million. This would suggest very strong prospects for growth and sales/new merchant volume.

· Strong Black Friday/Cyber Monday sales - 36,000 new customers and Underlying Merchant sales of USD 11.3 million achieved over 4 days.

· Denied license in California - but this is subject to appeal within 15 days - and it has been revealed in the weekend news that this ruling comes with no penalties and no fees.

· Sezzle’s position is that it does not operate as a lender but under a different financing model as does its competitors. Sezzle says that it will work with the California Department of Business to find a path to resolution and correct any issues.

· Quarterly update coming this month, January 2020.

· The share price has already fallen minus 20.81% and minus 15.71% over two days in a row, probably due to a combination of panic, low shares on issue and cascading stop losses.

· You get all the new business developments and extra traction for only $1.40 right now. Just one week ago it was sitting comfortably at $2.10

 

[Miner]

I read that article from the AFR yesterday.
Four paragraphs of interest:

A spokesman from ....that although it's decision to deny Sezzle a licence to issue loans in the state did not expose the company to fines or penalties, it reserved it's rights to pursue the company via other avenues.

The Department of Business Oversight is not precluded from doing so in additional actions, such as a resist and refrain order or a civil action for ancillary relief, the spokesman said.

(My comment civil action means court action, the USA loves this type of action, highest concentration of lawyers per head of population in the world.)

If a consumer uses Sezzle to finance a $35 purchase and was charged all fees provided under the user agreement, the consumer would have paid an equivalent annual percentage interest rate of 600%.

The regulator said Sezzle had been engaged in illegal unlicensed lending after it denied the company a licence which rival Afterpay had secured only seven weeks earlier, describing credit sales made by Sezzle's partners as "not bona fide".

Personally, until the smoke is clear, I would not be too tempted to try this one. It is a high risk and gain now to invest on Sezzle. I am not that brave to sizzle my fingers and wallet

 

[verce]

Possible gap up on the open due to bargain hunters? Cooler heads prevail?

 

[frugal.rock]

Possible gap up on the open due to bargain hunters? Cooler heads prevail?

I considered this an unlikely scenario today... however tomorrow this may happen, or not!.... managed to watch it a bit earlier on today out of interest only.
Was greatly interested after seeing the 4 largish candles down around 11am, followed by a double bottom, was satisfied enough that the bottom was in around 1.18.
I bought in at 1.24 and again at 1.285.
Missed the close at 1.36 but am satisfied a possible decent retrace is underway... eeeks!
Was going to dump just before close but resisted the urge, have to wait until tomorrow to see if that was the right decision.
F.Rock

 

[barney]

was satisfied enough that the bottom was in around 1.18. I bought in at 1.24 and again at 1.285.

Good entries if it does reverse FR. Good luck with it.

 

[bonox]

bought in yesterday at 1.27 having fat fingers on the buy button and missing at 1.2, but a sale at 1.72 has made up for that. Now, where to spend the proceeds. Good luck all.

 

[barney]

was satisfied enough that the bottom was in around 1.18. I bought in at 1.24 and again at 1.285.
Was going to dump just before close but resisted the urge, have to wait until tomorrow to see if that was the right decision.F.Rock

There is a lesson for all of us …. Trade your analysis not your urges

I remember a smart trader once told me … never trade on "impulse"(personally still get that wrong a bit)

You assessed the low was in and acted, then resisted the impulse to sell ….

Who said you can't pick bottoms! Nicely done FR

ps What level are you considering taking some profit off the table?

 

[frugal.rock]

It's all off.
Shaking fat fingers cost me at least $1000...
But the good news is, $3360 total profit!
That was yesterday's double dip, then sold today, dipped in again... sold again. $680 profit from today's re-dip but that's included in the the total above.
I'm out, however, if they are successful with the Calli licence, the SP will do silly things on open again.
Cheers, F.Rock

 

[fergee]

I considered this an unlikely scenario today... however tomorrow this may happen, or not!.... managed to watch it a bit earlier on today out of interest only.
Was greatly interested after seeing the 4 largish candles down around 11am, followed by a double bottom, was satisfied enough that the bottom was in around 1.18.
I bought in at 1.24 and again at 1.285.
Missed the close at 1.36 but am satisfied a possible decent retrace is underway... eeeks!
Was going to dump just before close but resisted the urge, have to wait until tomorrow to see if that was the right decision.
F.Rock

Great call @frugal.rock big pop this morning, well done that took watermelons man.