I find it really interesting that everything you have listed as a positive, is in my view a negative.
Experience of 30 years
FXL has been around for 30 years and was unable to adabt to the new BNPL space and is now a fraction the size of peers. In this instance experience certainly hasn't helped them one bit. In fact, I'd argue that trying to change FXL's traditional business model into a pure BNPL is like trying to turn the Titanic. It's slow and takes a lot of effort.
Purchases of up to $30k
It's no coincidence that peers (other than ZipMoney) don't offer this service. Afterpay and the likes have people use the service 25x per year, each time earning 4% fees, while higher priced items would be used very infrequently (I used certegy to buy a ring, used it once and paid it off over 2 years). So both FXL and FXL use warehouse funding facilities to fund the transactions, but APT's ability to reuse that warehouse facility over and over and over makes it extremely capital efficient. I don't remember the numbers but it basically means a $100m warehouse facility can produce something like $2bn in loans.
Net profitability
FXL is profitable in 2020. It's certainly a positive but BNPL investors aren't investing for a dividend yield in 2020, they want to see capital growth as the businesses expand globally. Profitability will come in time. Afterpay's ANZ division, for example, has been referenced as being "highly profitable" by Nick Molnar.
Funds?
I find your comment of "gives FXL funds that other BNPL can only dream of". Perhaps you need to look at the amount of capital that was raised by peers (e.g. Afterpay $800m) and compare that to FXL's recent cap raise. Not sure how you, as an investor, can be so misinformed.
Future expansion plans
At this point I realised that you're delusional. Peer BNPL providers are gaining traction in the biggest consumer markets in the world, while FXL (supposedly much easier for expansion plans) has grand plans targeting Ireland and New Zealand...
For anyone who hasn't done so I'd encourage studying up on investor heuristics, some psychological phenomenon that can make investors make very bad investment decisions. One of the most important ones is confirmation bias, where investors look for things that aren't there to confirm/justify their investment. This post, is just one example of this but hot copper is ripe with it. Tread carefully.
FXL Price at posting:
$1.02 Sentiment: None Disclosure: Not Held
(20min delay)
