$5 Party, page-332

Enjoyed the video mate, you're an engaging presenter.

The BNPL space definitely has some exciting growth metrics i.e. transaction volumes, active customers, active merchants, explosive topline growth which you touched on. I can definitely see why these stocks have really rocketed in these times, it is very easy to be enamoured by "triple digit growth". As long as the buyers outweigh sellers, these will continue to perform. I've traded OPY into the 4C and it has been a cracker.

However putting aside the growth, I don't think it's a great business just yet. The latest 4C shows an operational deficit of $4mil between their customer receipts and payments to merchants. They are actively losing money when their service is used. I guess the speculation is that with scale that this will be remedied but the model doesn't actually make the business money at this juncture. The market may overlook this but growth at any cost isn't sustainable. They will just keep on tapping shareholders for capital to keep the dream alive. With the intensity of competition which is occurring in the space, it is a zero sum game.

Happy to take the trade as it comes but growth metrics aside, its hard to hold it for long.