2 Cents by June 2022, page-87

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mondyinvest

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18/05/22

12:22

Post #: 61475270
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Originally posted by DanMachine: ↑

>myIOU is the company's flagship product, and as for the digital transaction side - frankly the market could not care less about it.

I think herein lies the problem. They have a strategy for raising capital and an income stream (myIOU, which I also see as a marketing tool) and, really, I think that what you have written in general is indicative of why people are so confused and bearish about the company.

You can't make money, not real money, on BNPL. This is proven many times. It doesn't take much bad debt to seriously destroy your operation.

I don't think I'm wrong in my analysis per se; that BNPL is just a grabber for bringing people into digital transactions. I disagree with (the spirit at least) of this:

>It's low margin business with no prospects for upsell, they're just doing data processing.

It's low margin but has the capacity for being very very high volume with no risk. This is the reason BNPL is always a failed business model - you have to operate in such a way that 98% of your customers pay or you're screwed. It's easy to get people to make a transaction when they can hold the product without paying, but therein lies the general problem of credit. Enforcing the contract.

There's no risk in the digital banking world - people pay when they make the transaction.

I guess what I've been saying has been nothing but conjecture. It makes sense to me that they would be operating in this closed off way because they're trying to navigate markets and different cultures, as well as get their fingers into pies, and get investors, all at the same time. Ultimately though the disconnection between what they say and do is too great - it looks dodgy to investors.

I don't agree with the general consensus that they've wasted money, however, since in the span of 18 months they've managed to find a fairly large user base and gain some confidence in their lending criteria, as well as negotiate a deal for a significant user base as well as the additional political and technological power IDSB will offer them.

We will see what happens with Tranche 2. I think management is well aware that if they mess this next quarter up they are done. Creeping bad debts or bailing on IDSB will be the real metric of the companies success.

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Thanks Dan, I appreciate the discussion and the time you took to share your views/analysis.

Wishing you all the best on it. Cheers

IOU Price at posting: 8.7¢ Sentiment: None Disclosure: Not Held
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2 Cents by June 2022, page-87

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2 Cents by June 2022, page-87

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