Why Sezzle Stock Crashed 40% in December

Stock Performance - Sezzle shares crashed 39 7% in December following a short report by Hindenburg Research [1] - The stock had previously surged over 2 000% in 2024 due to a shift from steep losses to big profits [2] - A stock offering in November contributed to downward pressure on the stock price [2] Business Model Analysis - Sezzle operates a buy now pay later platform allowing users to make purchases in four payments [5] - The company primarily earns revenue from merchant fees and a subscription service offering additional features [5] - Sezzle targets users with poor credit which is a key point of criticism in the Hindenburg report [6] Hindenburg Research Report - The report claims Sezzle s business model is unsustainable citing high interest rate borrowing and lending to high risk users [6] - Hindenburg Research suggests Sezzle s subscription service growth may be inflated by accidental signups rather than true demand [8] Future Outlook - Investors should monitor Sezzle s subscriber numbers to assess the sustainability of its subscription service growth [9] - The company s subscription service launched in July 2023 and has reached 529 000 active users as of the report [9] - A potential peak in subscriber numbers could validate Hindenburg s concerns while continued growth may indicate real demand [9]