Slowing momentum and end of escrow fast approaching, but a good business model with high quality management, page-43

Hey Niraj, sorry for the slow reply and happy New Year to you.

Subsequent to my last post was the Q3 result which I was very impressed by. Since my last post they reported a great result and the share price has fallen slightly despite a very strong bounce for BNPLs, and small caps generally. I feel better about B4P today. I’m not in it yet - I’m still cautious of the end of escrow and I want to see what happens. I’m hoping that the additional liquidity creates a great buying opportunity.

Just keep in mind B4P’s business model is very sensitive to any changes in their loss rates. When they writeback credit loss provisions in a quarter it provides a big tailwind to the NTM but it’s not a sustainable driver of the transaction margin. So I like to look at how the transaction margin is trending over multiple quarters to get a better understanding of the underlying.

So long as unemployment rates remains low I think they should be able to keep delivering these strong NTMs, which hopefully drives regular profitability.