OAKLAND, Calif.--(BUSINESS WIRE)--Shares of Sezzle Inc. (SEZL) plummeted over 25% in intraday trading on Wednesday, December 18, 2024, after Hindenburg Research published a report accusing the company of “borrowing expensive capital to make extremely risky loans through [its] struggling platform that is rapidly losing customers.” Gibbs Law Group is investigating a potential Sezzle Inc. (NASDAQ: SEZL) Securities Class Action Lawsuit on behalf of shareholders who lost money in Sezzle Inc.
What Should Sezzle Inc. Investors Do?
If you invested in Sezzle Inc., visit our website, or call us toll-free at (888) 410-2925 to get more information and discuss how you may be able to recover your losses. Our investigation concerns whether Sezzle Inc. has violated federal securities laws by providing false or misleading statements to investors.
What is the Sezzle Inc. Lawsuit Investigation About?
On December 18, 2024, Hindenburg Research published a report alleging that Sezzle Inc. makes “extremely risky” loans with interest rates of 12.65% in order to create the appearance of near-term growth. Sezzle’s earnings growth in 2024 appears to be “significantly driven” by rapidly issuing these lower-quality loans, according to Hindenburg.
Merchants are also purportedly abandoning Sezzle’s platform, “with the company reporting only 23,000 active merchants,” down 51% since 2021. Hindenburg further claims that even these numbers may be exaggerated, and it only found evidence of 6,776 merchants on its website.
The Hindenburg report maintains that Sezzle’s partnerships with key merchants like Target have “quietly failed,” despite previously touting these relationships to investors. Sezzle also appears to be “boosting its near-term subscription numbers with sketchy enrollment practices” like enrolling users into recurring monthly subscriptions without their knowledge, as alleged in the Hindenburg report.
Following this news, shares of Sezzle Inc. dropped over 25% in intraday trading on December 18, 2024, causing significant harm to investors.
About Gibbs Law Group
Gibbs Law Group represents investors throughout the country in securities litigation to correct abusive corporate governance practices, breaches of fiduciary duty, and proxy violations. The firm has recovered over a billion dollars for its clients against some of the world’s largest corporations, and our attorneys have received numerous honors for their work, including “Best Lawyers in America,” “Top Plaintiff Lawyers in California,” “California Lawyer Attorney of the Year,” “Class Action Practice Group of the Year,” “Consumer Protection MVP,” and “Top Women Lawyers in California.”
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