The Sezzle Inc (ASX: SZL) share price is rocketing higher on Tuesday.
In early afternoon trade the buy now pay later provider’s shares are up a massive 26.5% to $1.72.
At one stage today Sezzle’s shares were up as much as 30% to $1.77.
Why is the Sezzle share price rocketing higher?
Investors have been buying the shares of the Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) rival after it released its third California Financing Law License update in five days.
In case you missed its previous update. Sezzle’s shares were sold off last week when it revealed that the California Department of Business Oversight (DBO) had stated its intention to not approve its application for a California Financing Law license to make loans.
This licence would allow the company to move away from its existing and convoluted model in the state.
The DBO statement stated that Sezzle had engaged in “illegal unlicensed lending in the state.”
The company denied this, advising that it does not operate as a lender. Instead it operates under a different financing model as a sales finance company and does not make loans.
It also advised that it planned to continue to work with the DBO to correct any issues so that it can proceed with its plans to develop a loan product in the state.
Which brings us to today. This morning Sezzle revealed that it has held its first call with representatives from the California DBO.
Based on those discussions, the company revealed that it is confident that it can create a successful application for a State of California Finance Lender License.
No further details were provided, but the company intends to update the market with any material developments as and when they happen.
The post Why the Sezzle share price skyrocketed 30% higher today appeared first on Motley Fool Australia.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia has recommended Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020