@rav103 I’m hoping you didn’t average down back up at $3.30 when...

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AlphaX

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28/05/22

10:38

Post #: 61676643
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Originally posted by AlphaX: ↑

hi mate,

I am in the hole on BNPL too, with a mistimed entry into affirm.

the issue is, nobody really knows the true interest rate risk that will carry onto BNPL businesses, both from a consumer stand point (top line), warehousing and borrowings, which also impact the bottom line. The risk also changes for the merchant, which (depending on the arrangement and reality of the situation) may also impact the BNPL players.

inflation is real, so this also impacts credit risk, but also increases TTV which has a beneficial impact on revenues too. Consumer spending continues to drop however.

People say inflation and high interest environments are good for financial institutions, however depending on numerous factors, I would somewhat disagree.

Cash is king for tech and growth stocks, helping ride through the storm.

once the markets realise the impacts interest rates, credit risk and inflation has on BNPL and any other tech, only then will we see a Re rating, but as none of us really know, funds, instos and retail all remain cautious - hence why liquidity is low across the board.

I can’t see $9-$10 this year, as zips cash position doesn’t support a rerate during these times, and the macroeconomic data doesn’t either. It is possible to see her get back to $4 to $5 by June or July, but a real re rate would come post convertible notes and any other raise on the cards - maybe late August or September.

a realistic outcome shorter term, which would see a rerate, would be a take over of zip for a 30 to 40% premium which places her around $4.50 to $5 from current levels.

investors and funds want to see her loss position reduce and start making profit, or at least a cemented plan and date to expect to see profit.

good luck and don’t make any irrational decisions is all I can say. Patience might pay off longer term, but whether that means $9 to $10, is anyones guess at this stage

if I held, I wouldn’t be accumulating or averaging down until the change in tides is here

just my opinion, not investment advice, dyor

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@rav103

I’m hoping you didn’t average down back up at $3.30 when you ask for my opinion mate.

#alphabets

ZIP Price at posting: 85.5¢ Sentiment: None Disclosure: Not Held
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0 Great analysis

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