Sezzle share price climbs 28% on Californian lending license update

Investor optimism looks to have returned to the stock somewhat, with Sezzle (ASX: SZL) soaring 28% after the company provided a brief update concerning its application for a Californian Lending License.

Sezzle share price: a turn around story?

Sezzle’s (ASX: SZL) management team have taken decisive steps to rebuild confidence in the stock today, with the company’s CEO – Charlie Youakim – revealing that Sezzle 'held its first call with representatives from the State of California Department of Business oversight ('DBO') on Monday US time.'

Optimistically, it was additionally pointed out that:

'Based on those discussions, Sezzle is confident that we have a path to resolution in creating a successful application for a State of California Finance Lender License.'

'The Company will continue to update the market of any material developments.’

Investors look to have seized upon the confidence expressed within this media release, with the stock trading 28% higher in the first couple of hours of trade. (And currently up 33%.) The Sezzle (ASX: SZL) share price now trades at $1.82 per share.

Building on Sezzle’s media release this morning, Mr Youakim additionally commented that:

‘We are thankful the DBO engaged us in discussion quickly and we are working diligently with them on a potential resolution and will have no further statement until that work is complete.’

Bears and bulls in focus

In most cases, nothing last forever.

At its most nihilistic the Sezzle (ASX: SZL) share price traded at the $1.170 mark – some 44% lower than it did prior to news breaking that the company had had its lending license denied by California’s DBO.

Even so, the company remained upbeat in the face of this mounting pressure. In the first market release on this matter, it was pointed out that:

'The DBO approved a competitor operating under a similar sales finance company model between the dates of our application and their public statement, so we believe there is a path to resolution.'

Broker thoughts

Turning away from the retail perspective, we see that Sezzle’s limited analyst coverage is bullish.

Specifically, the only broker covering Sezzle (ASX: SZL) – Ord Minnett (OM) – is decisively optimistic on the fast-growing company’s prospects, initiating coverage on the company last month with a BUY rating, a risk rating of HIGHER and a significant 12-month price target of $3.40 per share.

Ultimately, OM was impressed by Sezzle's recent Black Friday performance – both in terms of underlying merchant sales growth and user adds over the period.

OM views the next potential catalyst for Sezzle (ASX: SZL) as its next quarterly release – expected January 20.

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