Great name with establishment backing that has been pumped up beyond all reason.
All the hallmarks of a bubble.
Massive valuation with no earnings. Check
Unsophisticated investors that are excessively confident and dismissive of anybody questioning the narrative. Check
Hyper exponential growth that climaxes and then reverses with heavy volume as the supply of new buyers is exhausted and the last of the somewhat rational holders run for the exits. Check
A fools rally then occurs when the especially gullible believe that they have a chance to get on board. Check
The founders wasted no time cashing in 38 million dollars worth of shares as soon as they were out of escrow. These were sold at $6.94 so one assumes that they would be even keener sellers at the current price if it was not for the need to keep up morale around the capital raises. Massive capital requirements is the one definite with this business. Billions will be needed to make a credible attempt at taking significant market share in the US and UK.
The APT business model relies on encouraging irresponsible young people to buy things that they should not. The banks in Australia have been most helpful so far by allowing the nominated accounts to become overdrawn by the APT repayments so that they can get in on the fun by charging fees. APT has essentially been relying on the banks to do the due diligence and often act as the debt collector as well. I do not believe that the US or UK banks will be as happy to play along.
The APT customer base of so called millennials are about the most fickle group imaginable and at some stage will either grow up and get a credit card or move to another platform with a flashier logo that allows them to spend even more money that they do not actually have. Once the competition really begins in this space then the only point of difference for the consumer is how much cash they can get and how easy it is to get. The merchants only care about the fee and it can be expected that this will converge to that charged by credit card companies. The merchant fee squeeze has already begun and the pressure will only build. Perhaps merchants will begin adding a surcharge or offering discounts to customers that pay on the day. Perhaps this will be a part of the regulation that is undoubtedly coming to this buy no pay later sector. Many risks to the downside IMO. DYOR
APT Price at posting:
$16.88 Sentiment: Sell Disclosure: Not Held
