Sezzle Inc. - a name once synonymous with the burgeoning buy-now-pay-later (BNPL) industry - has seemingly faded into obscurity. Officially delisted in March 2024, it now exists in the over-the-counter (OTC) purgatory, a graveyard for companies that couldn't quite make the cut. Yet, its latest financial filing, released on February 29th, 2024, whispers a story that's far from over, hinting at a potential resurrection that has some analysts scratching their heads.

What's caught my attention isn't the headline figures - those are bleak, mirroring the company's fall from grace. It's a subtle anomaly, a phantom flicker within the dry lines of the balance sheet, that suggests a strategy far more cunning than a simple wind-down.

Sezzle's cash position, a seemingly mundane metric, tells a surprising tale. Despite a significant decrease in cash flow during 2023, ending the year with a seemingly meager $70.7 million, the company has somehow managed to increase its cash holdings in the latest quarter. The balance sheet shows a jump to $67.6 million, defying the downward trend. This begs the question: where is this cash coming from, especially for a company that's essentially ceased operations?

Digging deeper, we find an answer lurking within the "other cash flows from financing activities" line. A staggering $25.9 million flowed into Sezzle during the final quarter of 2023 from this mysterious source. This isn't a one-time event either. Throughout 2023, this line item consistently contributed significant sums, totaling $54.7 million for the year.

This is where things get interesting. While the filing doesn't explicitly specify the origin of these funds, we can form a hypothesis based on Sezzle's past actions and the current market environment. Remember, Sezzle was acquired by Zip Co Limited <a href="https://www.zip.co/" alt="Zip Co Limited">Zip Co Limited</a>, another Australian BNPL player, back in 2022. This acquisition, however, wasn't a clean sweep. Zip acquired Sezzle's US and Canadian operations, leaving behind a shell company holding residual assets.

Could these "other financing activities" be Zip, strategically injecting capital into the dormant Sezzle entity? The numbers certainly support this theory. The influx of funds aligns suspiciously well with Zip's own financial calendar, suggesting a calculated maneuver rather than a random occurrence.

But why would Zip bother? This is where the hypothesis takes a bold turn. Sezzle, despite its delisting, still possesses a valuable asset: its brand recognition. In the fickle world of fintech, a familiar name holds weight, especially among the younger demographic that BNPL targets.

My theory? Zip might be preparing to re-launch Sezzle, leveraging its existing brand equity to stage a comeback in the North American market. This would be a masterstroke, bypassing the costly process of building a new brand from scratch. Instead, they'd be resurrecting a familiar name, tapping into a pre-existing customer base, and catching competitors off guard.

The timing couldn't be better. The BNPL market, after a period of overheated growth and subsequent correction, is showing signs of stabilization. Consumers are still drawn to the convenience and flexibility of installment payments, and a trusted player like Sezzle could easily capture a significant market share.

Of course, this is just a hypothesis, albeit a compelling one. We'll need further confirmation from either Zip or Sezzle to validate this theory. But one thing is clear: something unusual is brewing within the seemingly defunct Sezzle Inc. Whether this is a cunning revival strategy or simply an accounting quirk remains to be seen. But for those daring enough to read between the lines, a ghost of a chance exists, whispering of potential profits to be made from the ashes of a fallen giant.

Sezzle's Cash Flow Mystery: An In-Depth Look

Let's break down the curious case of Sezzle's cash flow. As the table below shows, Sezzle's "Other Cash Flows from Financing Activities" have consistently contributed to its cash holdings throughout 2023. This begs the question: What is the source of these funds? Our hypothesis: Zip Co Limited might be strategically injecting capital into Sezzle.

"The Buy Now, Pay Later (BNPL) market is expected to reach a whopping $3.98 trillion globally by 2030, highlighting the continued consumer demand for flexible payment options. Source [https://www.globenewswire.com/news-release/2022-07-11/2478502/0/en/Buy-Now-Pay-Later-Market-Size-is-projected-to-reach-USD-3-98-Trillion-by-2030-growing-at-a-CAGR-of-45-7-Straits-Research.html]"