Halfway through this very odd year for both the stock market and the American economy, Minneapolis-based payments company Sezzle led Minnesota’s publicly traded companies in stock performance, with shares that tripled in value.
Then came July and August. Sezzle shares peaked on July 3, started downward and then plunged in August after it reported second-quarter earnings.
Today, Sezzle’s platform for managing consumer payments as an alternative to credit cards has more users than ever and is yielding record profits. Its shares are up 40%, which is well above the 15.6% total return of the benchmark S&P 500 index but far below their summertime peak.
This rollercoaster performance proves the timeless aphorism attributed to multiple market and CEO sages: “The stock is not the company, and the company is not the stock.”
Recent days produced more volatility. Sezzle released third-quarter results after market close on Wednesday, saw a 12% drop the next day, then showed a partial recovery Friday and Monday.
“I try not to care about the market. I think that’s one of the keys of making a profitable company,” Sezzle CEO Charlie Youakim told me on Friday.
That’s really hard to do, however, especially when the company continues to show strong revenue and profit growth against its prior-year results. Sezzle’s revenue was up 76% in the second quarter and 70% in the third, while adjusted profits in both periods grew more than 50%.
“I remember the day we announced our results for the second quarter,” Youakim said. “I told everyone ‘Great job. I’m not sure how the market is going to see this, but don’t worry about it, because we’re doing a great job.’ And then I could not believe what happened. I was shocked. We were shocked. Like, wow, what is going on?”