"Management are supposed to be capital allocators. It’s...

"Management are supposed to be capital allocators. It’s literally their job to grow the business whilst managing cashflow in/out. "

Has the business grown? Yes. Do they know where their money is? Yes. Can they expect it back? Yes.

While I agree with the principle, I don't see that they have done a bad job of this. What do they need the cash for? To get more customers. It's not like they're a car factory and they invested all of their cash in tyres for orders that aren't yet placed. The BNPL product is, quite literally, a system for consumers to borrow their own future earnings. Additionally, there are a very large number of competitors in the credit space. It's a hard problem to manage since as soon as you go live, pretty much all of your capital is "invested" in the customer base. So this isn't the way you would strategise if you were running a company, you'd keep a cash reserve. Okay, that's cool. I'd probably agree and not take this level of risk as well, however, with that said, that's because I understand credit and credit law in Australia.


Consider this isn't afterpay, this is potentially a 6 month interest free. You have to wait 6 months to get your capital back. It seems to me that the strategy is to gain momentum and infamy as quickly as possible. I don't see that as a fundamentally flawed strategy in the problem space.




"I’ve read some strange things on these threads, but trying to spin running out of cash as a good thing has to take the cake."

How much is currently on loan to customers? As far as their report goes, whatever's on loan, they can expect 99.4% of it back in 6 months.

Re: Kevin and the side hustle.
I agree, BNPL is a side hustle. The real business model (and the real serious money) is micro-fees from having many people use their digital banking platforms.

But it's an important part of getting people from a cash economy to digital; the "grabber" if you will.

https://www.theedgemarkets.com/article/percentage-malaysians-using-cash-payments-down-78-%E2%80%94-paynet#:~:text=Percentage%20of%20Malaysians%20using%20cash%20payments%20down%20to%2078%25%20%E2%80%94%20PayNet,-Bernama&text=KUALA%20LUMPUR%20(April%206)%3A,from%2089%25%20before%20the%20pandemic.

I go literally weeks in Australia without seeing paper money (comparatively we're at about 25% of all transactions being in cash). Malaysia is ripe for picking, so to speak, if you can somehow convince them to start using cashless transactions.

6 months to pay for things? That's a really good incentive.