You are correct, for every $1 of receivables financed via the warehouse facility, a small percentage has to be funded by equity (more like 10-15%, but let's not split hairs). So, for an additional $1b of receivables to be financed, Afterpay would need to contribute $200m of equity into the warehouse vehicle (using your 20%). Afterpay is currently turning over its receivables book ~15 times per year, so an additional $1b of receivables would represent an increase in annual TTV of ~15b. Currently Afterpay's annual TTV is ~$22b, so it could double its TTV by contributing $300m of additional equity into its warehouse funding vehicle. This would potentially involve the issue of 2.5m shares (at an issue price of $120 per share), which would be a dilution of less than 1%. Do you see this as being problematic?
APT Price at posting:
$129.00 Sentiment: Buy Disclosure: Held
