Little sympathy from me mate. This isn't an Appen where it's hard to understand how or why the stock is getting pummelled. Or a Magellan where it just came out of nowhere.
I made a whole thread just on Zip based on a survey that pointed to how unsustainable the BNPL model is. I threw every possible downside argument to holders constructively, that:
- BNPL is basically sub-prime lending for people that can't get credit cards, or are maxed out of existing credit.
- Competition from Visa, MA, Paypal, etc was going to hammer the margins or financially wreck the newcomers (this is why ANTHONY and NICK sold to Square).
- This business model hasn't been tested in a recessionary environment.
- With credit card companies, the banks at least have recourse on a person's assets. What do BNPL providers have? Oh, we'll blacklist you and send your name to a debt collector. That's sustainable!
At the end of the day, BNPL companies are simply marketing scams. They offer NOTHING new or of value to the general public - there is no innovation here. It's just lending by another name based on the most misleading phrase ever invented by that scumbag Molnar: "We're an alternative to banks" like he's the financial Jesus liberating the world from the sin of debt. What a douchebag. This guy was out to do nothing but get rich for himself at the expense of the people he legally preyed on.
These companies are predators who rely on people, generally Americans and bogans out west, who are already living on the edge and are indoctrinated into perma-consumerism. That is the sickening business model of this company - to push already borderline povos who can't access traditional debt to go into it through a legal loophole.
I warned all of you about this when the price was much higher, so I'm not going to sugarcoat my posts just to make people feel better. I hope there's a lesson in this and that you listen to your voice of reason when looking at speccy companies like Zip in future.
No dividends, debt-fuelled growth, reliant on a booming economy - Larry's house of cards is about to collapse.
(20min delay)