Why Should I Invest in APT Now ?, page-6

3 best reasons. 1. FOMO trend. It's the number one stock on the ASX at the moment suffering FOMO and the trend is up. Meaning every time dick and Harry want a piece of Afterpay regardless of the fundamentals of the business. If you buy now and sell before the steep descent starts you'll make money quickly
2. It's just made the top 20 listed companies on the ASX. Some funds may increase their holdings because their fund rules allow them to increasing in the short term demand of the stock and meaning SP rises
3. It's got 40 percent US ownership for its investors.


A few reasons I wouldn't be buying Afterpay right now
1. Compared to Klarna the number one bnpl globally Afterpay market cap is 2.5 times larger than Klarnas.
Why is this relevant? How do you value bnpl. We are basing it off growth globally it looks. So when you look at Klarna it is 3-5x the metrics of Afterpay in terms of total customers, revenue, app downloads a month, and the number of countries it operates. ASX investors say Afterpay is the global leader it's not! Other bnpl are trading on lower multiples. As the bnpl market matures and we get to see how they are all going. So far Afterpay,Zip, Sezzle are all delivering 100 percent year on year

Quadpay have delivered the fastest growth of any of the bnpl in the last 6 months in terms of percentage month on month and year on year and app downloads (not absolute values Klarna is number 1 for all those followed by Afterpay. Afterpay is not better than Klarna on any metric in absolute values)
2. Afterpays internal.fulture raises concern. Numerous reports on Glassdoor in Australia and the US of a poor culture. Read the Glassdoor reviews. Worryingly 2 months ago Afterpay had a 3.9 score. Now a 3.8 so the culture is trending down not up. What I've seen once a company hits a score of 3.6 or lower the name is out there in the market as a bad employer. They are getting close to that point. Zip, Sezzle are two examples of an excellent culture when using the same Glassdoor metrics. You cannot just say that employees are having a whinge. Because if so they'd be doing that for other bnpl companies.
3 execution risk. In the last 6 months we've seen Afterpay flatline a quarter of growth in the us. Management gave no explanation other than it was a blip. But directly after this Nick announced a significant change in the org chart making him co CEO to fly back to the US to right the ship. Afterpay are the only bnpl we have seen not delivering against their strategy to date .
4 someone is lying re the clearpay acquisition. The owners of the remaining 10 percent of clearpay have publicly announced that ten percent is worth 200 million. Afterpay have said it's worth 3 million. A captial raise may be needed of 200 million to cover it and then risk of a class action for failure to disclose. Cats out of the bag on this one. Is Afterpay lying or is it the owners of the ten percent of clearpay. They both can't be right

6 diversification and the app. Afterpays app is good, but after I personally ran through use of Zip, Afterpay and Klarna I rate the apps Zip number 1 Afterpay 2 and Klarna 3
Afterpay have no other revenue stream apart from its merchant fees and late fees. Late fees and their merchant fees are the highest in the bnpl industry.

7. The above point leads to future risks of govt regulation and intervention. It's been called out by Klarna that Afterpays merchant fees are the highest. If merchant fees are capped by govt like what happened to Cisa, Aypal and the big 4 banks regarding merchant fees and credit card late fees Afterpays revenue model effectively implodes.
Should merchant fees be capped at 4 percent of sale this will have an enormous impact on Afterpay : a reduction of near 50 percent of revenue in the country affected and near zero impractical on their competitors who charge lower merchant fees. This will happen so it's a matter of when not if and to what extent will the govt intervene.

That's my two cents