Agree with you... I put it up here and it was removed... He...

Agree with you... I put it up here and it was removed... He questions real ROE, being significantly lower with debt coming into play, and he also does not include costs of cards in the equation, nor does he talk about the imminent RBA interchange rules coming into play, which will regulate and force AFYs fees down too.

I think it is a viable model, particularly if they broaden their product suite... I don't think anyones arguing that... its more about its being absurdly overvalued... by the few that hold it.

Put it this way, if this business were making 2% net fees, as a pure payments play, with entree into Asia pacific, the marketcap wouldn't be that far fetched, considering the growth...but its ala its not.

Nice little quote from him -->


"In my view AFY should be viewed more as a low-doc consumer lending company (that is enabled by technology) rather than a sexy “fintech” company. I think incremental demand is being generated via the provision of incremental credit into the system, but the key to its sustainability is whether or not the likes of “Lindy” can afford to pay back this credit ultimately. We do not yet have an answer to that question – it will show up in the Net Transaction Loss ratio at some stage.
Note also that for first time customers, AFY requires an upfront payment of the first instalment. So with so many first time customers coming on-board currently, this would have been quite favourable to AFY’s reported transaction economics.
And yes, AFY’s transaction economics (e.g. merchant fee percentage) will definitely be impacted by the likes of ZipMoney who has raised a whole bunch of money and competing aggressively."

@dubspec @Mexicanandre