Maybe should have a look all these BNPL stocks before considering this "new product", imo.
https://themarketherald.com.au/beforepay-the-acceptable-face-of-payday-lending-2021-11-30/In FY 2021, Beforepay wrote off $5 million in bad debt against income of $4.5 million, accounting for 27.3 per cent of an overall $18.3 million loss, or a whopping 9.5 per cent of all the money they lent. The Commonwealth Bank made provisions for an expected loan loss rate of 0.17 per cent of gross loans in February 2020, which means Beforepay’s bad debts in 2021 were 5580 per cent higher than what CBA expected.
Ben Williams, Founder and CEO of Fresh Equities, which provides access to listed capital raises asked: “Is this any different to a non-revenue mining explorer?”
Yes, it is.
Beforepay is marketing their IPO to investors just like they market their loans to their customers — with lots of glitter and a sincere hope nobody does the maths.
It’s one thing to be told a mining explorer
hopes to find gold based on geological surveys and land studies. It’s another thing altogether for that explorer to tell us they are confident they
will find gold, despite a track record that suggests they have no idea where to look and, even if they do find it, will admit that half of it probably isn’t even gold at all.
So, if it’s not the fundamentals that are attracting bidders to the IPO, what is it?
It’s not the track record of their chairman, who struggled to lead Westpac through a scandal but just published a book on leadership anyway, it’s certainly not the growing opposition by consumer advocacy groups. It’s absolutely not the founder, Tarek Ayoub, who has been awfully quiet since leaving for Canada in May.
Perhaps they heard that before he left, Ayoub boasted to a lawyer at a Stone and Chalk event in Sydney that his customers were “late 20’s, early 30’s living at home with mum and dad and absolutely shit at managing money,” claiming that “they really pay me 1000 per cent interest!”
Perhaps investors are instead choosing to listen to replacement CEO, Jamie Twiss, who says “we cater to people who just need a little extra to get through a squeeze in a way that is very customer-centric and responsible.”
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