LBY LAYBUY IPO ANALYSIS, page-146

You need to read financial statements better. Laybuy had a revenue of just under $14 million in 2020 and a cash burn of 16 million. What's the point you say, it's because in order to grow as a company they need to be aggressively marketing their product to the whole of UK at a fast pace. These sector is fairly new and the company needs to get much of the market share they can before Clearpay and Klarna eat it all up, hence the higher rate of cash burn. Laybuy could easily make a profit if they reduce the cash burn, but again the lesser the growth rate of volume in terms of revenue, the lesser the volume of profit. Flexi Group is a perfect example of these as their revenue has been stagnating, but there profits have remained the same the last couple of years.

I highlighted in black the revenue and operating expenses of other BNPL companies at similar life cycle as Laybuy currently is now. Zip had a cash burn of $36 million, Openpay had a cash burn of $53 million, Afterpay has a cash burn of $43 million and compared to Laybuy which only had a cash burn of $16 million, Laybuy is more efficient. Maybe that is because the UK is a smaller size country compared to Australia and US, hence less money spend on marketing and logistics. Anyway, all those companies were 2-10 times the value of share price to what Laybuy is now. Hence I reckon the share price will hit $4+ dollar by March.

Laybuys growth in the UK is excellent and they will eventually expand into Europe. Plus Paypal aren't launching their Pay in 4 product in the UK short term, which will help with Christmas being around the corner and Zip delayed their launch into the UK until Q1 of 2021 . I reckon people will be doing more online Christmas shopping these year, hence more exposure for Laybuy. That gives Laybuy a opportunity to get a head start and that March annual report will be a good one.

Anyway, that's just my thoughts on the company and DYOR.





Laybuy - LBY