The Z1P meme thread. # Original z1p memes list 2021, page-266

Hey totally agree!
I'm not denying zips growth has been great!
Their us quadpay great.
Finally getting into the UK is about a year late but better now than never. They may struggle the first few years to get a foothold in the UK due to Afterpays Clearpay and Klarna especially dominate the geo.
What I don't like is they haven't been able to rein in the losses. Analysts abroad interestingly 6-9 months ago were all talking and writing articles about when the two majors APT and Zip would get to the break even point. It was hypothesized that apt would get there 3 months ago. But instead the losses for both continue to blow out. That for me and I think for other investors should be a real concern. Analysts had predicted one they got to a certain scale the unit economics would improve. But we aren't seeing that. Total yearly and quarterly losses continue to accelerate. They aren't growing as fast as the growth but that's irrelevant because it's still growing. Ie the more they sell the more they loose.

Regulatory risk. We have all heard it blah blah right. But this is going to put added pressure on margins, in addition to increased competition. Even 1 percent less will have a material impact to these businesses that are low margins.
As an example if Afterpay on average makes 3.5 percent on the sale value but then regulation and completion reduce that average to 2.5... also think as more people used these services the marketing spend to acquire new customers will naturrally increase, putting more pressure on the unit economics.
The current market valuations are very high.
Given they make no profits....
They are being valued like a tech stock. But tech stocks can be making 50-80 percent margin particularly with cloud based software.


i think the sky high valuations must come down. Growth must slow eventually. Look at Klarna it's growing customers in the US 3x faster than Afterpay on absolute value but it's got so many customers now the aggregate affect is 30-40 percent growth. This is where both Apt and Zip are heading. Apt will be where Klarna is today in about 5 years. Zip may be there in 8.

A lot to think about. It's why I don't hold.
Then there is inflation concerns.. and the cost of borrowing going up, so this model is likely to be impacted on the top and bottom line with increased borrowing costs as well as reduced margins. And these are both out of their control, unlike say a software company that sets it's price somewhat based on competitors but has a much higher margin product with a lot more fat to play with.

And people will say bugger off we have heard all that before. I just think so many of you are emotionally involved on this stock or worse taking a gamble and just a FOMO investor.