Credit cards are far more predatory than BNPL... WAY MORE, but they survive because they charge a shitload more. If you're charging 20% interest, a yearly fee of $200 from every user, you have a lot more to play with.
I don't like that I agree with mondyinvest, but i do in more ways that I want to.
If I make a list of all the negatives, and a list of all the positives that I feel right now for z1p, i struggle to find positives. I really really hate that i agree with it, but this post here, i would challenge anyone with real data to dispute this.
https://hotcopper.com.au/threads/zip-did-a-layoff-on-5th-april-2022.6679117/?post_id=60684364
They've been running the company on cap raises/dillutions, they've stated that a lot of the employees were paid in shares (LD just recently stated this in an interview), the share price has gone to shit, they are losing approx 50c in every dollar in revenue, and they couldn't raise the 50m they wanted to in the most recent cap raise.
They are buying sezzle that is currently losing 50 to the dollar in revenue, and i'm not sure we even know the true financials of that company at this point or at the point that the deal goes ahead, which will be July, August or September 2022. So we are in limbo until then with regards to exactly how bad it is what is being purchased.
So the upsides to all of this.
Z1p has a reasonable sized established customer base, and whilst they are losing money, they have those customers, and a lot of those customers are transacting There is value in that. There's also significant value in the retail data that they obtain through sales, i'm not sure what data they are collecting/running metrics on though. This is really their biggest asset, they just need to come up with more ways to make more money out of their current customer base. You can say they aren't loyal to any brand, and to a large degree this is true with most businesses these days (not all i know, but most people don't give a shit about loyalty, they just want the cheapest), but they are still an established customer.
The only reason i can see they are buying sezzle, who were effectively about to go broke, is that it gives them another run of uncertainty to float for a few more months, followed by a big influx of customers for the next report after that, so you're almost effectively buying yourself another 6-9 months of party time before crunch time comes, which will be at the cost of... investors money, because they will inherit sezzles bad debts and customers as well.
Another upside is they will be able to cut staff for sezzle a lot, and just assimilate the customers into their model, so the money sezzle is losing will be cut, if revenue stays the way it is. I am hoping they will be able to do this on a really big scale.
Hearing they are laying off staff is actually the first bit of news that makes me feel like they are starting to care, i know you guys will put whatever spin on it you want to suit your narrative, and yes there are genuine negatives to this, but when your business is on it's ass, the positives of reducing staff outweigh the negatives, any of you guys here with a clue will know this. Posting about all the negatives of this without writing about the overall picture is just showing your bias through for whatever reason, it's pretty easy to pick up on it for the most part. (not mentioning any names)
Please feel free to share any more data based positives, because where i'm sitting, it's looking pretty grim. Having a large established customer base is nice, but when that customer base is the reason you are losing money, and that money fountain is getting to the point where it's really drying up, the value of that customer base diminishes pretty quickly.
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