Nice work Stefan, have always appreciated your posts on HC.
I don't disagree with anything you've written, and think buying at $10 was a smart move. Though If I was sitting on a close to 100% gain I'd be selling and going back to wait on the sidelines.
We're a long way from returning back to any level of our lives that we had before covid-19. In Australia we've been put under this lockdown for the next 6 months, and there is every indication of it lasting 12 to 18 months. So my assessment of Afterpay's future prospects rely not on the company and its financial position, but the environment it now exists in, and the environment it will be in when the lockdown is lifted fully.
From social media there are a few consumers who are still buying in the lockdown, who by their language presume it's a temporary thing i.e. they think in 2 weeks they'll be back at work and going out with their friends.
There are also consumers who believe they are in 'steady jobs' who hadn't thought this would impact on them. Not we're starting to see secondary areas being affected in more professional spaces. These people likely have higher ongoing costs (bigger rents/mortgages) and therefore the support packages might not leave them anything to support discretionary spending. However they may have some savings and could prudently pay off their Afterpay debts and then cut down spending.
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For me, I'm happy to stay out until they release the business update. I'm hoping they focus a lot on Covid-19 in it, but can imagine them not. I imagine it'll have some good numbers in it, considering the impacts of this only started in March, and more late March. I do expect the last quarter to have a much larger impact, hence the announcement in July will be more telling. Between now and then we'll have more understanding of the wider impacts and how people are changing their behaviour.
I'm still keeping track of the metrics I have been, however feel like some of the relationships established pre virus may not stand up anymore, but have to wait for the data to come in. April will be interesting to see as the deaths continually rise, and consumers realise they shouldn't have bought that Animal Crossing Nintendo Switch.
APT Price at posting:
$19.55 Sentiment: None Disclosure: Not Held
