Shares in buy now, pay later operator Sezzle rebounded 30 per cent on Tuesday after the company told investors it was still hopeful of obtaining a California Finance Lender licence after its application was blocked last month.
Sezzle shares slumped after the California Department of Business Oversight released a statement on December 30 rejecting the Minnesota-based, ASX-listed company’s application for the lending licence and accused the company of conducting illegal lending in the state.
Like market darling Afterpay, Sezzle lets shoppers pay for their purchases in instalments. Shoppers who use Sezzle select the payment type at checkout and Sezzle then takes over the sales contract from the retailer. Shoppers then repay in four instalments, the first of which is made at the time of purchase.
It’s unclear whether the business will continue to be able to operate in California without a license. Upon reviewing its application, the DBO found the business had already engaged in “illegal unlicensed lending” in the state and denied its application.