# APT - Afterpay Limited



## So_Cynical (9 July 2017)

Afterpay and Touch have merged to become the Afterpay Touch Group, 215 million shares on issue with a MC of 669 Million, top 20 hold 65%, i imagine an investor presentation will be released in a few weeks or so, 3 directors in the top 20.


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## So_Cynical (14 July 2017)

Market Update released.

http://www.asx.com.au/asxpdf/20170713/pdf/43km9zdcnvnkvx.pdf

Spectacular numbers.


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## So_Cynical (5 November 2017)

Going Pretty well 4 months in, post Merger, a clear channel has formed just a matter of how long it holds? IF the channel holds it will be worth 20 bucks a share this time next year...couldn't possibly happen could it? would certainly require some international roll out success.
`


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## Choochoozz (13 November 2017)

Been watching this chart since it was $5.. Pussied out and shouldn't bought in...


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## So_Cynical (13 November 2017)

Choochoozz said:


> Been watching this chart since it was $5.. Pussied out and shouldn't bought in...




I added it to my superfund in late Sept @ 4.10 pretty much caught that bottom perfectly, dumb luck of course...up another 5.6% today.


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## Choochoozz (14 November 2017)

So_Cynical said:


> I added it to my superfund in late Sept @ 4.10 pretty much caught that bottom perfectly, dumb luck of course...up another 5.6% today.



Well I've just bought in @ 5.9. We'll see how this plays out either accept 10% loss if it does dip. Looking at the graph it is looking positive.


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## So_Cynical (16 January 2018)

2 Announcements out today, International expansion/strategic partnership/Placement and quarterly (xmas) business update - 15 m placement with matrix partners and more spectacular numbers.

https://www.afterpaytouch.com/results-reports#

Share price smashed through $7 to new all time highs.

~




~


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## Choochoozz (16 January 2018)

So_Cynical said:


> 2 Announcements out today, International expansion/strategic partnership/Placement and quarterly (xmas) business update.
> 
> 15 m placement with matrix partners, and more spectacular numbers.
> ~
> View attachment 85729




Very expected with the retail season full swing this year.

Now the challenge is today moving forward and what kind of results we'll see with the christmas retail season over.


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## So_Cynical (16 January 2018)

Choochoozz said:


> Very expected with the retail season full swing this year.
> 
> Now the challenge is today moving forward and what kind of results we'll see with the christmas retail season over.




All 4 charts in my post above show growth just getting stronger and stronger, the growth is exponential.


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## Choochoozz (16 January 2018)

So_Cynical said:


> All 4 charts in my post above show growth just getting stronger and stronger, the growth is exponential.




Ah They've also just released the announcement regarding international expansion to the US


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## galumay (16 January 2018)

Certainly missed this one, I coudnt see the long term potential and didnt believe the narrative. Its been a good pick for you, So_Cynical!


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## So_Cynical (17 January 2018)

galumay said:


> Its been a good pick for you, So_Cynical!




Biggest single winner ever, Portfolio thru the roof, and all thanks to SKC and that loser thread.

Was the ASX Shockers Thread...this post was all it took. https://www.aussiestockforums.com/threads/asx-shockers.31661/page-2#post-928106
~


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## So_Cynical (17 January 2018)

Opened above $8 new all time high $8.16 ~ thinking about it the Aussie and NZ business must be close to saturation thus maybe only 1 more quarter before we see some flattening of growth, they really need to get busy with international expansion, could i suggest just targeting one or 2 mid sized markets first...


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## Choochoozz (17 January 2018)

I think we should expand to international online shops if anything.. then slowly seep into the physically larger retail market of US.


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## Neecy (17 January 2018)

Hello, I’m new to trading but watched tv today and heard mention of afterpay going into the US market, is it too late to buy? Thanks


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## galumay (17 January 2018)

Neecy said:


> ....is it too late to buy?




Neecy, its probably not a great reason to buy, regardless of price! If your sole basis for an investment decision is a mention on TV about a business exanding into the US, then your money will be safer in a bank!

From an investment point of view you have to decide whether you think APT is currently trading at a discount to value, I have done no detailed analysis or research so I have no idea if that is the case or not.


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## So_Cynical (17 January 2018)

Neecy said:


> Hello, I’m new to trading but watched tv today and heard mention of afterpay going into the US market, is it too late to buy? Thanks




In my opinion it is too late to buy Afterpay ~ however i did think Bitcoin was over valued at $5.


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## galumay (17 January 2018)

So_Cynical said:


> ...however i did think Bitcoin was over valued at $5.




You may yet prove to be correct about APT and fairy money!


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## galumay (17 January 2018)

So_Cynical said:


> In my opinion it is too late to buy Afterpay




Its always interesting when a business I have bought into has a run up in it's share price to the point where I would describe it as "too late to buy". Logic tells me I should therefore sell, but I find that a really hard decision to make! 

How do you feel about it So_Cynical? Are you considering realising some or all of the profit? 

I do a lot of hand wringing and to-ing and fro-ing before I buy, but thats nothing compared to my paralysed inaction when I try to decide when to sell!!


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## So_Cynical (18 January 2018)

galumay said:


> Its always interesting when a business I have bought into has a run up in it's share price to the point where I would describe it as "too late to buy". Logic tells me I should therefore sell, but I find that a really hard decision to make!
> 
> How do you feel about it So_Cynical? Are you considering realising some or all of the profit?
> 
> I do a lot of hand wringing and to-ing and fro-ing before I buy, but thats nothing compared to my paralysed inaction when I try to decide when to sell!!




Yep same here buying and particularly selling leads to a lot of hand wringing etc, i was close to selling a few APT last week before the latest run up, i made a list 3 weeks ago of stocks to sell and stocks to buy as i switch to FF dividends as retirement approaches, APT has a big red sell next to it based on the fact that any dividends are years away.

I have now decided to sell about 2 thirds of my position on the next run up $8.50 - will buy a market neutral fund and keep some cash for the big pull back to come.


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## Neecy (18 January 2018)

galumay said:


> Neecy, its probably not a great reason to buy, regardless of price! If your sole basis for an investment decision is a mention on TV about a business exanding into the US, then your money will be safer in a bank!
> 
> From an investment point of view you have to decide whether you think APT is currently trading at a discount to value, I have done no detailed analysis or research so I have no idea if that is the case or not.



Thanks galumay, much appreciated, as you have noticed I need to study up. Bought a good few sya and my order of 2c didnt go through for vic.


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## Neecy (18 January 2018)

Thanks everyone for the input.


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## HelloU (23 January 2018)

I was under the impression that the retailer was stung for costs with this.....so for the consumer it would be the no brainer choice and hence a massive cash cow for afterpay. I now see that jetstar charges the customer $10 to use this option......so not such an automatic choice for the consumer. I wonder how many other retailers will push back against the fees over time?


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## So_Cynical (24 January 2018)

HelloU said:


> I was under the impression that the retailer was stung for costs with this.....so for the consumer it would be the no brainer choice and hence a massive cash cow for afterpay. I now see that jetstar charges the customer $10 to use this option......so not such an automatic choice for the consumer. I wonder how many other retailers will push back against the fees over time?




The last time i booked jetstar im reasonably sure they charged a $10 card fee, so $10 anyway...and yes the consumers dont pay anything to use the service and the retailer isn't charged much either but does pay.


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## HelloU (24 January 2018)

So_Cynical said:


> The last time i booked jetstar im reasonably sure they charged a $10 card fee, so $10 anyway...and yes the consumers dont pay anything to use the service and the retailer isn't charged much either but does pay.




Methinks point missed and now clouded.....my comment was a little red flag for long holders through this expansion and beyond. (not advice, just thoughts, coz I make stuff up)

Why flag for long: it is VERY difficult to value a company without good cash figures and knowing bad debts. So in years to come these will be need to be closely watched following this ...excitement.

with respect, "they charged a $10 card fee, so $10 anyway" shows me you almost got there. If fee for afterpay was nil then no-brainer choice. So looking at $10 fee......

Did you incur the fee - yes (note that this is a personal choice as fee free choices exist)
Did you pay the money - I hope so, so all debts wiped clean
What if you did not pay - card provider goes thru credit law process.

A $10 card fee for debit at 0.5% means total flights at bout $2K.

Nek person wants same $2K flight but only has $260 to their name...hmmm......
buy flight - pay $250 plus $10 fee (now broke but jetstar got FULL FARE coin from delay service)
take flight - was great
what about not pay next instal - better check credit law application  - this might be a little problem as maybe company not come under credit law as not actually providing credit as no interest terms involved (I am not a lawyer so just making this up)

So to cover bad debts we need lots of people that will pay the bill using the service. For good payers the choice becomes do I pay a $10 fee and delay?, or just use Poli and pay nil fee?, or use debit and pay 0.5% (prolly much less than $10)? .......no longer a no-brainer choice.

If big retailers push back on fees what is your good payer to bad ratio?
(coz the big retailers are really your ideal market)

Not here to nit pick small points or argue over if it was 0.5% or 1% fee, but to stimulate the bigger research that may be required from us as shareholders. tired now, prolly wont do this again.


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## HelloU (24 January 2018)

Short version for non readers.....

bad debt will kill you.......so you need to attract the PAYERS rather than be only attractive to the NON-PAYERS.


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## So_Cynical (24 January 2018)

HelloU said:


> Methinks point missed and now clouded.....my comment was a little red flag for long holders through this expansion and beyond.




1.5 million unique customers and new merchants always get an immediate lift in sales, i suppose many users are doing it to save money by spreading out payments so its not like 10 bucks doesn't matter, 20 would be a deal breaker for some..

Investor beware as its still early days for afterpay and competitors will come and bad debts will grow along side revenues etc, i wouldn't be buying in at this price..


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## Kryzz (17 March 2018)

Any ideas with regard to the large volume spike in APT yesterday? Looks like >5m shares were traded on the day, new record. Short interest seems to be at record highs too.

Cause for concern?


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## bigdog (15 May 2018)

APT up 9% this morning after ASX announcement

APT $7.590 

+$0.630 (+9.05%)
AFTERPAY TOUCH FPO (ORDINARY FULLY PAID)
Tue 15 May 2018 11:19 AM (Sydney time

15/05/2018
9:31 AM 
	

	
	
		
		

		
		
	


	


 U.S. Market Launch Commences
https://www.asx.com.au/asxpdf/20180515/pdf/43v15p2prpj3x2.pdf











4080


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## So_Cynical (15 May 2018)

Up near the all time high again...the shorts were right late march through to mid April then wrong since, the US expansion could see revenues climb what 1 or 2 or 3000% and then think China etc.

VISA or Paypal have to get interested at some point soon i would think...there is no way some big international doesn't come in and buy em.


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## So_Cynical (5 June 2018)

Smashing through $8 to a new all time high of $8.78 ~ no announcement yet, someone accumulating? its a big move up.


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## greggles (5 June 2018)

So_Cynical said:


> Smashing through $8 to a new all time high of $8.78 ~ no announcement yet, someone accumulating? its a big move up.



I see they've just entered the US market so I guess there's a lot of optimism about the revenue potential that huge market holds. 

Are you aware of any US based competitors providing a similar service?


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## McLovin (5 June 2018)

greggles said:


> Are you aware of any US based competitors providing a similar service?




PayPal.


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## greggles (5 June 2018)

McLovin said:


> PayPal.



Do Paypal allow you to spread your payments out over several months? I thought they were just an alternative payment method (i.e. payment has to made in full)?


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## McLovin (5 June 2018)

greggles said:


> Do Paypal allow you to spread your payments out over several months?




They sure do.

https://www.paypal.com/us/webapps/mpp/paypal-credit-signin

(I'd guess that Amazon Pay/Apple Pay will probably go down a similar route at some point)


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## greggles (5 June 2018)

McLovin said:


> They sure do.
> 
> https://www.paypal.com/us/webapps/mpp/paypal-credit-signin



Then that's a pretty big competitor. I wasn't aware that they provided that service. I've only ever used Paypal for the odd online purchase with eBay.

I note the following from Afterpay's announcement concerning their US launch:


> Afterpay will commence in the US as an online only platform with an intention to introduce in-store capability in due course. Initial transaction experience and learnings in relation to retail and customer dynamics will be translated into a programme of product development specific to the U.S. market. To effectively embark on this strategy, a U.S based team has been established with extensive skills across relevant business functions. This team will leverage core global infrastructure and processes now established in Australia with the benefit of applying strong local experience and capabilities.




I wonder what Afterpay's point of difference will be? Paypal is so ubiquitous, I imagine it would be difficult for Afterpay to make themselves stand out as a viable alternative. If they're not at the point-of-sale in retail outlets (at least initially) then sales will only be online which is where Paypal dominates. It will be an uphill battle to gain a foothold.


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## McLovin (5 June 2018)

greggles said:


> Then that's a pretty big competitor. I wasn't aware that they provided that service. I've only ever used Paypal for the odd online purchase with eBay.
> 
> I note the following from Afterpay's announcement concerning their US launch:
> 
> ...




It's a competitor that's bigger than Comm Bank and is used as a verb in the US for payment. Throw in Amazon and Apple which at some point will want to get involved, imo, even if it's just to break the dominance of Visa and MC in payments and APT is the poorly funded upstart playing with three giant gorillas.


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## Country Lad (5 June 2018)

.


> Afterpay will commence in the US as an online only platform with an intention to introduce in-store capability in due course.




I find this strategy a bit odd.  They are going into a market where their strongest and largest competitors live.  I would have expected them to start with the in-store which is their strength and where they have most experience. 


.


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## So_Cynical (5 June 2018)

McLovin said:


> It's a competitor that's bigger than Comm Bank and is used as a verb in the US for payment. Throw in Amazon and Apple which at some point will want to get involved, imo, even if it's just to break the dominance of Visa and MC in payments and APT is the poorly funded upstart playing with three giant gorillas.




Someone will buy em, its just so obvious, an near certainty...whats a lousy 2 or 3 billion for the big players.


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## McLovin (5 June 2018)

So_Cynical said:


> Someone will buy em, its just so obvious, an near certainty...whats a lousy 2 or 3 billion for the big players.




Probably. I still can't believe the multiples this thing is trading at for what is not much more than a finance company with a mystery algorithm that I'd bet will blow up when the next downturn hits.


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## PinguPingu (30 June 2018)

Big sentiment change from GS. Upgraded with a price target from $6.30 to $11.15. Nice little break-out with big volume Friday.


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## So_Cynical (30 June 2018)

I sold a few on Friday - just a few, i like the sound of $11


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## Country Lad (19 July 2018)

So_Cynical said:


> I sold a few on Friday - just a few, i like the sound of $11




Then you will likely like $13 better.  Up 21% so far.


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## galumay (19 July 2018)

McLovin said:


> Probably. I still can't believe the multiples this thing is trading at for what is not much more than a finance company with a mystery algorithm that I'd bet will blow up when the next downturn hits.




The increase in US revenue could be a hidden problem, lots of poor, very low income people in the US, the default rates could be a major problem going forward.

I watch with interest from the sidelines, i never got it, from the beginning.


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## barney (19 July 2018)

Only just noticed this thread … Great pick @So_Cynical  ….. be your shout wouldn't it


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## bigdog (19 July 2018)

Great day for APT after ASX announcement today






19/07/2018 10:59:16 AM 8 
	

	
	
		
		

		
		
	


	







 Business Update
https://www.asx.com.au/asxpdf/20180719/pdf/43wmpkgfxs0v2m.pdf

AFTERPAY TOUCH GROUP LIMITED
(ASX: APT)
Business Update
(all currency figures are in Australian dollars unless otherwise stated)
19 July 2018
Afterpay Touch Group Limited (ASX: APT) (Afterpay or the Company) is pleased to provide a business update for the three-month period ended 30 June 2018 (Q4 FY18) and the financial year ended 30 June 2018 (FY18):

▪ Over $2.18bn of total underlying sales processed through the Afterpay platform in FY18 (289% increase over FY17)

▪ Q4 FY18 underlying sales of approximately $736m represents a 171% increase over Q4 FY17 and a 39% increase over Q3 FY18

▪ Approximately 16,500 retailers and approximately 2.2m customers currently live and transacted on the Afterpay platform since inception

▪ A strong start to Afterpay’s U.S. business since launching in mid-May 2018 (over $11m of underlying sales in the first full month, June 2018). Over 400 retailer contracts signed and over 200 retailers currently transacting on the platform, including major millennial focused brands, URBAN OUTFITTERS (live since 16 May 2018) and REVOLVE (live since 9 July 2018)

▪ Significant new enterprise retailers and service providers continue to sign-up to Afterpay in Australia including BOOHOO, BING LEE, MITRE 10 and DIESEL, in both traditional retail categories and new vertical expansion categories such as health, beauty and entertainment with a strong future pipeline

▪ Afterpay in-store is building momentum. Approximately 10,000 individual shopfronts are now live with Afterpay in-store

▪ Several senior, globally experienced team members joined the business in FY18 to support business expansion and core product and system development, particularly in the areas of risk, data and technology development

▪ Gross Losses and Net Transaction Losses trended down in Q4 FY18 and generally improved over H2 FY18, despite the increased underlying sales performance and merchant diversification in the same period. Consequently, a stronger Net Transaction Margin is expected in H2 FY18 compared to H1 FY18

▪ Previously announced product enhancements in Australia in relation to external ID verification and the capping of late fees have now been implemented in line with previous guidance. U.S. product enhancements will be configured progressively as further transactional data and experience is obtained

▪ Pro-active and voluntary engagement with all key industry stakeholders continues: government, regulators including ASIC, and consumer groups, to ensure the differentiated nature of the Afterpay service is clearly understood and to receive constructive suggestions for improvement

▪ Previously announced $200m warehouse receivables funding facility with major international bank (to sit alongside the existing NAB $350m warehouse receivables facility in Australia) continues to progress from term sheet towards final documentation

▪ The Pay Now businesses remain stable from both a revenue and margin perspective. A review of the European E-Services business is in progress

▪ Subject to audit, FY18 Group Revenue and Other Income is expected to be in the order of $142m, FY18 Group EBITDA is expected to be in the order of $33m to $34m and FY18 Group EBTDA is expected to be in the order of $27m to $28m, both prior to one-off and share based expenses but including the majority of expenses incurred in establishing and operating the U.S. business
The Afterpay Business in Australia and New Zealand Continued to Perform Strongly in Q4 FY18
Strong underlying growth and performance continued in Q4 FY18 with respect to all key metrics (unaudited):

Platform growth:
▪ Over $2.1bn of total underlying sales processed through the Afterpay platform in FY18 (287% increase over FY17)

▪ Q4 FY18 underlying sales of approximately $722m represents a 166% increase over Q4 FY17 and a 36% increase over Q3 FY18 and now tracking at over $3bn on an annualised basis based on recent monthly performance

▪ Platform growth is being driven by a combination of new customers (growing at an average of over 3,600 per calendar day in Q4 FY18), repeat customer activity, new retailers (consistently on-boarding between 600 and 1,000 new businesses per month), increasing share of retailer check-out and adoption of Afterpay’s in-store proposition by existing multi-channel retail partners
▪ Today, it is estimated that Afterpay processes more than 10% of all physical online retaili in Australia and over 10% of the purchasing Australian populationii has transacted with Afterpay since inception


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## kid hustlr (19 July 2018)

Incredibly well performing share.

Am i skeptic for thinking the fact that something like this is getting used so much is a worrying sign in the long run?


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## So_Cynical (19 July 2018)

Big day for me, 2 stocks up 32% what are the chances of that, anyway many said the 2 Billion valuation was over the top, 2.4 Billion is plain crazy.


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## McLovin (20 July 2018)

So_Cynical said:


> Big day for me, 2 stocks up 32% what are the chances of that, anyway many said the 2 Billion valuation was over the top, 2.4 Billion is plain crazy.




It's $3b.


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## bigdog (20 July 2018)

APT up $2.55 this morning and now $16.08 at 10.20 AM






286


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## galumay (20 July 2018)

The smell of FOMO is like napalm on a still morning


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## So_Cynical (20 July 2018)

McLovin said:


> It's $3b.




LOL yes what a difference a day makes..


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## McLovin (20 July 2018)

So_Cynical said:


> LOL yes what a difference a day makes..




True that!

It's going parabolic and you only need to go over on to the other place to see FOMO (as Gal correctly calls it) maxing out. No doubt the inroads they've had in the US have been impressive for just over six weeks, but it _is _just over six weeks. There's only blue sky baked in now.


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## bigdog (20 July 2018)

Hit all time high of $16.19 and finished @ $14.38

Traded value $100 million for 6.7 million shares


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## So_Cynical (21 July 2018)

Afterpay is a credit card disrupter.

A credit card costs the holder to use, interest, annual fee, late fees and any merchant fees that are passed on, Afterpay doesn't cost the consumer anything and requires the retailer to pay like 2% or so, they are/have/will take market share from credit card company's.

The credit card industry has been around since the 70's (remember bankcard?) operating pretty much unchanged, growing year after year, and now change has come and its Afterpay leading the charge.


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## Knobby22 (21 July 2018)

Interesting view point with some truth. We can expect some blowback from the credit card companies who will use their control of Congress to attack this start up especially as it is Australian. Some risks ahead.

I have now nearly doubled my money but really can't value this company. There are a lot of opportunities and threats.


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## McLovin (21 July 2018)

So_Cynical said:


> Afterpay is a credit card disrupter.
> 
> A credit card costs the holder to use, interest, annual fee, late fees and any merchant fees that are passed on, Afterpay doesn't cost the consumer anything and requires the retailer to pay like 2% or so, they are/have/will take market share from credit card company's.




Afterpay is only free if you pay on time the same as a credit card, otherwise the fees are pretty steep. Afterpay Merchant fees are similar to Amex, and higher than credit card fees. There are plenty of no annual fee credit cards.

The big advantage, imo, is it's instant and circumvents a credit check. It's more convenient that a traditional credit card for that reason. Who knows how well that will hold up in a recession.


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## greggles (21 July 2018)

McLovin said:


> The big advantage, imo, is it's instant and circumvents a credit check. It's more convenient that a traditional credit card for that reason. Who knows how well that will hold up in a recession.




I think it will hold up very well in a recession. It will enable those under financial pressure to continue to purchase higher ticket items and to have the cost of those items spread over four payments with no interest payable should the scheduled payments be made on time.

A $1000 purchase then becomes four $250 payments which can be managed easier in times when personal savings might be at a minimum. It may end up being a trap for the financially irresponsible but as a source of free credit it is an appealing option for those with little cash in the bank.


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## McLovin (21 July 2018)

greggles said:


> I think it will hold up very well in a recession. It will enable those under financial pressure to continue to purchase higher ticket items and to have the cost of those items spread over four payments with no interest payable should the scheduled payments be made on time.
> 
> A $1000 purchase then becomes four $250 payments which can be managed easier in times when personal savings might be at a minimum. It may end up being a trap for the financially irresponsible but as a source of free credit it is an appealing option for those with little cash in the bank.




I'd argue someone who requires time payment services already has low savings. That's confirmed when you see the demographics of the average APT and Z1P user; young women, not a demographic associated with high rates of savings. If they were to lose their job, do you think they'll be making their time payments for the $1,000 of clothes they just bought on The Iconic or paying things like rent and food? Bad debts will explode for a company like this. These guys need two things, fast payment so they can churn their lending book and keep collecting merchant fees, and low bad debts, because their return on capital isn't that amazing.


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## notting (21 July 2018)

In my dictatorship any woman buying more than $1000 of cloths in a day will be shot in head


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## McLovin (21 July 2018)

notting said:


> In my dictatorship any woman buying more than $1000 of cloths in a day will be shot in head




In my dictatorship women don't wear clothes.


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## greggles (21 July 2018)

McLovin said:


> I'd argue someone who requires time payment services already has low savings. That's confirmed when you see the demographics of the average APT and Z1P user; young women, not a demographic associated with high rates of savings. If they were to lose their job, do you think they'll be making their time payments for the $1,000 of clothes they just bought on The Iconic or paying things like rent and food? Bad debts will explode for a company like this. These guys need two things, fast payment so they can churn their lending book and keep collecting merchant fees, and low bad debts, because their return on capital isn't that amazing.




Perhaps you're right, but I don't think that will prevent people from using the service in times of recession. Sometimes they won't have a choice. If the fridge goes on the blink and there's no cash to get another one, taking advantage of interest free credit options can become a matter of necessity.

I wonder if there is any research data on the uptake of interest free credit in times of recession. I remember when it seemed as though almost every white goods retailer was offering six months interest free on purchases over a certain amount. This option proved so popular that the credit facility was eventually extended to up to 24 months if people spent more so as to entourage people to buy and spend more. The only way Afterpay differs is that the repayment terms are reduced to four payments every two weeks. This encourages people to use it for smaller purchases which are generally more manageable.

Afterpay are relying on people's poor decision making and financial irresponsibility to generate revenue. if everyone paid on time they would go bust. I think you will find that in a recessionary environment they are likely to introduce more flexible terms over longer time periods. I'm just speculating but such changes would make sense in order to increase uptake of the facility.


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## Toyota Lexcen (21 July 2018)

Are people using their credit card or debit card with After Pay?


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## So_Cynical (22 July 2018)

Toyota Lexcen said:


> Are people using their credit card or debit card with After Pay?




Debit card auto deductions.


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## Toyota Lexcen (22 July 2018)

thanks, i found the terms and conditions. you can use either a debit or credit card


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## So_Cynical (2 August 2018)

A bit of commentary.
~


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## Sdajii (3 August 2018)

Just having a read though the posts. Some people seem to think APT makes money by people failing to pay on time and paying late fees. The company figures actually show that it's extremely low. Almost everyone pays on time, and the amount of money coming in from late fees is lower than the amount of money lost on people defaulting and never paying, which is also extremely low. These figures are an irrelevant part of the overall picture.

APT makes its money from retailer fees. About 4.1% of the purchase price goes to APT when a customer uses Afterpay. That's virtually the entire thing. They don't want people to be late and pay extra fees, and the late fees are only there as an incentive to pay on time.

It's completely different from credit cards, which do make their money from people being too stupid to either pay upfront or repay their debt on time, and accumulate even increasing debt. APT's system actually doesn't continually increase if someone is in arrears. The late fees are small and capped, though the customer won't be able to use Afterpay. This ensures that only good customers are repeat customers, and the repeat rate is huge.

It's actually a really good business model.


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## HelloU (3 August 2018)

noting that the big retailers avoid fees by passing a charge onto the consumer. ... small detail to throw into the mix


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## Knobby22 (3 August 2018)

Sdajii said:


> Just having a read though the posts. Some people seem to think APT makes money by people failing to pay on time and paying late fees. The company figures actually show that it's extremely low. Almost everyone pays on time, and the amount of money coming in from late fees is lower than the amount of money lost on people defaulting and never paying, which is also extremely low. These figures are an irrelevant part of the overall picture.
> 
> APT makes its money from retailer fees. About 4.1% of the purchase price goes to APT when a customer uses Afterpay. That's virtually the entire thing. They don't want people to be late and pay extra fees, and the late fees are only there as an incentive to pay on time.
> 
> ...



Very good post Sdajii.
just like to add that I see the risk to the business as the people who don't pay on time.  If this is too high, defaults wil rise and cash flow will reduce. The second risk is fraud. It will be interesting to see what happens in the USA. I am worried that the fraud rate will be higher also USA competitors like Visa and Mastercard might set up a competitor. On the plus side if they can make it work in the USA then the world is their oyster.


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## So_Cynical (3 August 2018)

HelloU said:


> noting that the big retailers avoid fees by passing a charge onto the consumer. ... small detail to throw into the mix



The retailers get an instant lift in sales - thats the pay off, thats why they sign up.


Knobby22 said:


> USA competitors like Visa and Mastercard might set up a competitor.



They are competitors, Afterpay is taking sales from them for sure.
~


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## Sdajii (4 August 2018)

I am surprised at the low rate of fraud and default in Australia, but it is what it is and the proof is in. I agree, it may well be higher in the USA, and it'll be interesting to see. No doubt they've thought more about minimising it than we ever will, and I'm guessing it won't be significantly higher there.

I do have my doubts about the USA being a market they can capture as large a percentage as they have in Australia of. There are more competitors operating in the USA for the 'I can't budget and want it now and would rather frig around later than think ahead because I need instant gratification' market, but they may also have a larger number of morons fitting the target, so the market there might be even larger than the population size suggests.

As may be clear, I have low respect for the typical person who would use this service, but I fully understand that they are plentiful and ripe for exploitation.

The major issue I see at this point, and the only reason I haven't bought in, is that enormous growth is already factored into the share price. Even if the realised growth is 10x the current size of the business, the share price is much too high. The business of course will thrive regardless of the share price, but it's possible to pay far too much for a good thing and lose a lot of money. On the other hand, I can see the potential for APT to grow enough to justify an even higher share price than what we currently have. Being so difficult to evaluate, it is a challenge to get a grasp of the risk/reward situation of this one. What I can say, is that *if* it ends up as well in the USA as we can conservatively say it will in Australia, I have no doubt it will have a share price higher than what you can buy it for now.


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## So_Cynical (20 August 2018)

$17.70 today's new all time high, its a runaway train.


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## aussymatt (20 August 2018)

So_Cynical said:


> $17.70 today's new all time high, its a runaway train.



Happy days .... I bought in at $9.10


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## bigdog (23 August 2018)

*Afterpay announces UK expansion as sales volume soars *


*ASX ANNs today*

*REQUEST FOR TRADING HALT*
Afterpay Touch Group Limited (ACN 618 280 649) (ASX:APT) (Afterpay) requests the securities of Afterpay be placed in trading halt with effect from the commencement of trading on 23 August 2018.

1. the trading halt is requested pending an announcement by Afterpay in relation to a proposed corporate transaction and *capital raising;*

"Afterpay said it was raising $108 million via an institutional placement to bolster cash in order to fund international expansion and secure new loan facilities in the US and British markets."

---------------------------------------------------------------------------------
*FY2018 Results Announcement*
AFTERPAY TOUCH GROUP LIMITED
(ASX: APT)
ASX Announcement 23 August 2018
*FY2018 Financial Results* (all currency figures are in Australian dollars unless otherwise stated)

Afterpay Touch Group Limited (the Company) today released its results for the full financial year ended 30 June 2018.

*FY18 Highlights:*
In line with the Company’s business update on 19 July 2018, the key highlights in relation to the

*FY18 financial results are as follows:*
 Strong financial performance in FY18, driven by strong growth in Afterpay and a full year contribution from Touchcorp (post‐Merger)

 FY18 Group Revenue and Other Income of $142.3m, up 390% on FY17, driven by an increase in Afterpay underlying sales and a stable merchant revenue margin

 FY18 Group EBITDA (excluding significant items) of $33.8m and EBTDA of $27.7m, up 468% and 380% respectively on FY17

 FY18 Group performance materially driven by the contribution of the Afterpay business. Top line Afterpay underlying sales and revenue growth has been complemented by improving transaction profitability:
- FY18 Afterpay underlying sales of over $2.18b, up 289% on FY17

- FY18 Afterpay revenue and other income of $116.8m, up 302% on FY17
- Afterpay Net Transaction Losses reduced to 0.4% of underlying sales in FY18 (versus 0.6% in FY17) demonstrating customers are continuing to use the platform responsibly

- Afterpay Net Transaction Margin increased to 2.6% of underlying sales (versus 2.5% in FY17), despite increased finance costs in line with Afterpay’s receivables book growth

 Group Statutory Net Loss After Tax was $9.0m, which improved by 7% on FY17 despite the impact of large, non‐cash related significant items (share based expenses and D&A) and one‐off costs:

 Non‐cash share‐based expenses ($16.4m) related mainly to the accounting impact of the Company’s share price movement since the proposed grant of the Group Head’s LTI in August 2017, which remains subject to shareholder approval

 Non‐cash D&A expenses of $17.3m principally related to a full year contribution of Touchcorp and the fair value uplift of Touchcorp’s intangible assets resulting from the Merger

 One‐off costs (net of fx gains) were $1.6m, mainly related to the Merger and international expansion activities

 The Group will adopt AASB 9 for the FY19 reporting period. Due to Afterpay’s very short receivables cycle, the impact is estimated to be relatively limited as it relates to Afterpay’s receivables impairment and revenue recognition methodology:

 FY18 pro‐forma AASB 9 estimated impact on Afterpay NTL is an increase of 0.1% from 0.4% to 0.5% of underlying sales. The Company is confident that its receivables impairment methodology is currently conservative and will be even more conservative post adoption of AASB 9

 FY18 pro‐forma AASB 9 impact on Afterpay merchant fee revenue is a reduction of $3.0m, if 100% allocated under AASB 9. A deferral of merchant fee revenue in this manner is a timing difference only and does not impact the receipt of cash when an order is processed

 The Group maintains a strong balance sheet at year end with significant cash resources ($49.2m) on hand and in‐trust. Additionally, Afterpay’s receivable portfolio remains conservatively geared with substantial unutilised facilities in Australia and New Zealand

*Significant Developments Since Business Update On 19 July 2018:*
 The Afterpay business continues to grow post year‐end with respect to all key metrics:

 Active customers are currently in the order of 2.3m and approximately 17.7k merchants are on‐boarded and transacting on the platform

 New customer growth and repeat customer engagement metrics are at strong levels relative to FY18 metrics

 Afterpay coordinated retail event (‘AfterYAY’ day) on 16 August 2018 resulted in the largest underlying sales day in Afterpay’s history

 Significant new retailers and merchants in Australia and New Zealand that are recently onboarded or are in the process of integrating (no material contribution to underlying sales in FY18)


----------



## bigdog (24 August 2018)

*WOW APT TODAY AT 10:09 AM*






6682


----------



## McLovin (24 August 2018)

$22m in write offs last year with ~$250m in receiveables. The year before it was $3m in write offs on ~$100m in receiveables. I thought these were not subprime borrowers?


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## bigdog (27 August 2018)

another great day to help my ASF 2018 year share tipping 

institutional placement must be laughing with the great share price they got
-- APT has successfully raised $117 million via an institutional placement
-- The Placement was priced at $17.05 per share
-- 6,682,200 shares with profit todays close of $27.2 million or 23.3%

*A Share Purchase Plan to raise approximately $20 million will follow the Placement with eligible Afterpay shareholders offered the opportunity to acquire additional new shares*


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## Knobby22 (27 August 2018)

I doubt we will get more than maybe $2000 worth within the SPP. They are very hot.


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## So_Cynical (28 August 2018)

Knobby22 said:


> I doubt we will get more than maybe $2000 worth within the SPP. They are very hot.




Its capped? i thought SSP's were open slather.


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## Knobby22 (28 August 2018)

So_Cynical said:


> Its capped? i thought SSP's were open slather.



Under the listing rules they can only issue a certain percentage of shares. You can ask for up to $15,000 but if everyone takes them up there will be a shortage of shares available.


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## Kate Winslet (28 August 2018)

Afterpay Touch raised $117 million to support funding os its expansion plan. Read this post: https://bit.ly/2MDsHnJ


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## RickSanchez (6 September 2018)

greggles said:


> Perhaps you're right, but I don't think that will prevent people from using the service in times of recession. Sometimes they won't have a choice. If the fridge goes on the blink and there's no cash to get another one, taking advantage of interest free credit options can become a matter of necessity.
> 
> I wonder if there is any research data on the uptake of interest free credit in times of recession. I remember when it seemed as though almost every white goods retailer was offering six months interest free on purchases over a certain amount. This option proved so popular that the credit facility was eventually extended to up to 24 months if people spent more so as to entourage people to buy and spend more. The only way Afterpay differs is that the repayment terms are reduced to four payments every two weeks. This encourages people to use it for smaller purchases which are generally more manageable.
> 
> Afterpay are relying on people's poor decision making and financial irresponsibility to generate revenue. if everyone paid on time they would go bust. I think you will find that in a recessionary environment they are likely to introduce more flexible terms over longer time periods. I'm just speculating but such changes would make sense in order to increase uptake of the facility.




Nope. Main revenue is from 4% charged to merchant per transaction. As soon as people pay back they can reuse that money, over and over .. say 12 times a year. That would be 12 x 4% = 48% return per year. Not a bad model.


----------



## luutzu (6 September 2018)

RickSanchez said:


> Nope. Main revenue is from 4% charged to merchant per transaction. As soon as people pay back they can reuse that money, over and over .. say 12 times a year. That would be 12 x 4% = 48% return per year. Not a bad model.




I guess "good" there depends on what side of the fence you're on. 

Given the current, and coming, economic evironment... these kind of business should do well. Not sure it'll last though. I mean, you're not supposed to kill your host you know. There aren't that many around in Australia.


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## So_Cynical (7 September 2018)

The $17.05 per share issue price is looking doubtful with today's close of $16, i wonder if this will rattle the conviction of some late to the party investors???

Pricing period Tue the 11th to Mon the 17th September.
~


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## greggles (7 September 2018)

RickSanchez said:


> Nope. Main revenue is from 4% charged to merchant per transaction. As soon as people pay back they can reuse that money, over and over .. say 12 times a year. That would be 12 x 4% = 48% return per year. Not a bad model.



Yes, I admit I had a flawed understanding of the APT business model. Clearly it's a success that works for both the merchant (increased turnover) and the consumer (easy credit on simple terms). I wish I had seen its potential earlier.


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## bigdog (7 September 2018)

Share price today $15.00 has crashed $8.00 since in the all time high on 24/08/2018 and is now below the $17.05 that the institutions paid

Offer to the shareholders share purchase plan will be the lower of $17.05 or the 5-day volume weighted average price of Shares traded on ASX over the Pricing Period at the end of the Offer Period.

The SPP opens on Friday, 31 August 2018 and is expected to close at 5.00pm (AEST) on Monday, 17 September 2018.


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## HelloU (7 September 2018)

bigdog said:


> Share price today $15.00 has crashed $8.00 since in the all time high on 24/08/2018 and is now below the $17.05 that the institutions paid
> 
> Offer to the shareholders share purchase plan will be the lower of $17.05 or the 5-day volume weighted average price of Shares traded on ASX over the Pricing Period at the end of the Offer Period.
> 
> ...



OT
why is that line shown in yellow? ( I mean what is the significance of the yellow)


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## kid hustlr (7 September 2018)

HelloU said:


> OT
> why is that line shown in yellow? ( I mean what is the significance of the yellow)




Inside Market

(Looks as though it was after hours anyway so it's irrelevant)

Its just how BD has his commsec set up


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## bigdog (8 September 2018)

Surprised APT has not been issued with speeding ticket!


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## So_Cynical (8 September 2018)

bigdog said:


> Surprised APT has not been issued with speeding ticket!




21 to 15 is a hell of a move over 5 trading days.


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## Knobby22 (8 September 2018)

So_Cynical said:


> 21 to 15 is a hell of a move over 5 trading days.



Doing a raising so a drop to $17 should be expected. Overshooted a bit.


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## bigdog (9 September 2018)

*Motley Fools reports (I find MF as site of great information)*
https://www.fool.com.au/2018/09/07/why-the-afterpay-touch-group-ltd-share-price-is-falling-again/

*Why the Afterpay Touch Group Ltd share price is falling again*

Shares in *Afterpay Touch Group Ltd* (ASX: APT) are down 5.8% to $15.07 in trade today and down from highs above $20 at the end of August as some of the wild investor enthusiasm for the business recedes.

Also adding pressure to the share price is an article in today’s _Australian Financial Review _suggesting that Afterpay has shifted around the timing of provisions between financial years to give the impression that EBITDA grew more strongly in FY 2018 than it otherwise might have done.


The shifting of a provision according to the AFR was related to the *Touchcorp* business AfterPay acquired back in 2017, with many ASX small-cap enthusiasts only having AfterPay on their radar as a result of following Touchcorp. In fact it was a business that was widely considered to have more potential back in 2016.

I for one made a catastrophic blunder in not fully considering the potential of the combined businesses as stock in the merged group went on to go absolutely gangbusters.

Even after today’s share price falls, AfterPay has a market value of more than $3.6 billion after posting a loss of $7.6 million on revenue of $116.8 million for financial year 2018.

It also reported earnings before tax, depreciation, and amortisation (excluding significant items) of $27.7 million, with the AFR article claiming this amount would be lower if Afterpay had not shifted around the timing of provisions related to the Touchcorp business.

Afterpay did launch its U.S. business in May 2018, with underlying retail sales hitting $20 million by July in an auspicious start, but the US remains a complex market that will stretch the resources of AfterPay to its limits.

It has also announced a deal to acquire a UK-based doppelgänger *ClearPay Finance* in exchange for 1 million Afterpay shares, while raising $117 million from institutional investors at $17.05 a share.

*Foolish takeaway*

AfterPay seems a great business, with excellent management and faultless execution so far, but I struggle to understand the valuation on more than 30x trailing revenue even with the group’s potential expansion into the UK and U.S.

After all this is a ‘buy now, pay later’ business with no real competitive advantage in offering interest free credit, rather than a software-as-a-service business boasting attractive economics and compound growth potential for example.

Notably some of its best technology around payments processing and point of sale financing came it to via the Touchcorp acquisition.

AfterPay may keep growing nicely on the back of its popularity with retailers and millennials, but its success is likely to attract more competition going forward.

As such you can count me out as a buyer of AfterPay touch shares, as in the expensive tech share space I think you’re far better off looking at software businesses that boast higher gross profit margins and more attractive economics.

629


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## So_Cynical (9 September 2018)

bigdog said:


> *Motley Fools reports -*




Motley fool has to write about something, next month the headline will/could be.

*Why the Afterpay Touch Group Ltd share price is rising again.*


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## bigdog (10 September 2018)

APT up $1.36 or 9.07% today at 12:15 PM


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## galumay (10 September 2018)

nek minnit,



So_Cynical said:


> Why the Afterpay Touch Group Ltd share price is rising again.


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## bigdog (12 September 2018)

https://www.finder.com.au/kmart-afterpay

*Kmart is getting Afterpay. Here’s when you’ll see it at the checkout*

According to numerous sources, shoppers will see Afterpay at their Kmart checkouts by 18 September – online checkouts that is. There is no word as to whether Kmart will be offering Afterpay to customers in-store.

Afterpay will allegedly be available for online orders totalling $70 or more to a maximum value of $1000.

While both Kmart and Afterpay have yet to release any official statement or information about the truth behind these claims, many shoppers have written about the news on social media.

Some users on Facebook have alleged that Kmart staff have been informed that Afterpay is indeed coming to online checkouts. Many users in Afterpay fans groups, such as Afterpay Obsession and We Love Afterpay, allege that they have called Kmart to confirm and have been told by representatives of the Kmart head office that Afterpay will indeed arrive at Kmart online this month.

Afterpay is a modern-day lay-by style service that allows you to pay for online or in-store purchases in instalments. Afterpay is currently available to use at top Australian stores like David Jones, Target and THE ICONIC.

Afterpay has recently broken into the US and UK markets and is now available to US customers shopping at Urban Outfitters and is available to Australian customers shopping at the UK site Boohoo.


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## bigdog (18 September 2018)

The SPP closed yesterday and SPP price is yet to be announced

I would expect to be high $16

SP is being clobbered today


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## Knobby22 (18 September 2018)

I bought a few more at the SPP but not that many as I already own enough.


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## bigdog (20 September 2018)

Perhaps the institutional placement that raised $117 million sold their shares early where SP hit $23

*SHOULD A SPEEDING TICKET BE ISSUED WITH SP CRASHING?*

SP is now $15.14

*ASX Announcement today
Afterpay closes Share Purchase Plan*

In accordance with the terms and conditions of the SPP, the issue price under the SPP has been determined *to be $16.96 per share,* being equal to the volume weighted average price (VWAP) of Afterpay’s shares over the five consecutive trading days on the Australian Securities Exchange (ASX) up to and including, 17 September 2018 (the closing date of the SPP) (rounded to the nearest cent).

At SPP close, valid applications totalling approximately $36.8 million had been received from over 3,500 shareholders (subject to cheque clearances). As the value of applications significantly exceeds the target of $20 million for the SPP, the Afterpay Board has decided to exercise its discretion under the SPP terms to scale back the SPP applications to a total of $25 million. All SPP applications will be scaled back on a pro rata basis.






194


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## Knobby22 (20 September 2018)

The SPP is being scaled back pro rata! normally they just say max $3,000 worth or similar.
I am going to get hardly any shares now.


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## peter2 (20 September 2018)

Strange that there such a big scale back when the shares are much cheaper to buy in the market.
edit: I suppose the company can't buy them in the market to sell them at the SPP price and avoiding any scale back and raise a bit more profit.


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## bigdog (20 September 2018)

I imagine subscribers to SPP will get 68% of what they paid up to $15,000 max.

$25 million divided by $36.8 million paid is 68%

I could imagine some smart folk wanting to bailout with their cheques not being cleared!!


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## bigdog (9 October 2018)

Age reported today:

Goldman Sachs continue to believe that Afterpay Touch will grow in the US despite threats of increased competition in the market. Square, Inc. recently announced that merchants could offer loans to customers to pay for large purchases using its payments platform.

Digital payments company Affirm also offered its customers the option to make purchases that could be paid in instalments, although this was only a promotional offer and the company otherwise operates like a credit card issuer.

Despite the increased competition, the broker believe that Afterpay remains differentiated in its offering and has a clear strategy in the US.

Goldman Sachs maintained its buy recommendation on Afterpay, and maintained its 12-month target of $26.15, a 47.7 per cent premium to its Friday closing price of $17.70.


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## Wysiwyg (9 October 2018)

I noticed in my last week of online shopping that AfterPay is offered on many sites now. Lay buy has taken an in-your-face turn.


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## Sdajii (9 October 2018)

Wysiwyg said:


> I noticed in my last week of online shopping that AfterPay is offered on many sites now. Lay buy has taken an in-your-face turn.




I've seen friends in my Facebook feed talking about Afterpay and excitedly sharing commercial pages which advertise that they're on board with Afterpay. Just a minute ago a friend (Facebook friend, someone I scarcely know) shared the EBGames page announcement that they are with Afterpay and is excitedly posting that he's going to buy stuff from them. It is becoming very heavily talked about. Last time I was in Australia (earlier this year) I hadn't even heard of Afterpay. I'll be visiting Australia in a couple of weeks and am interested to see how much passive exposure I get to it. I'll be travelling to VIC, NSW and QLD and will go to shopping centres and talk to friends in all three states, and while it's not a service I'd ever actually want, I'm curious about the procedure so I might buy a pair of shoes or something on it while I'm in the country.


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## peter2 (12 October 2018)

After the current "bloodletting" I think it's worth noting that APT is rallying before others.


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## peter2 (17 October 2018)

This is the pattern I'd wait for if I was a short term cfd trader.  






It's possible that we may not get the HL before starting higher. 
It's also possible that the market sells off again and price goes lower, through this minor support level.


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## bigdog (17 October 2018)

*Afterpay, payday lenders and 'debt vultures' to face Senate inquiry*

Price at 3:39 PM today






https://www.smh.com.au/business/ban...s-to-face-senate-inquiry-20181016-p50a1b.html

Payday lenders, debt management firms and Afterpay will be the subject of a new Senate inquiry into parts of the finance sector that have escaped the scrutiny of the Hayne royal commission.

After a year of scandal for the country's biggest financial institutions, Labor has proposed the new inquiry into parts of the financial world that are often slammed by consumer advocates, and are either unregulated or subject to much less regulation than banks.

The Greens, independent Derryn Hinch and Centre Alliance senators Rex Patrick and Stirling Griff threw their weight behind the inquiry on Wednesday, guaranteeing it would have the votes to pass the Senate.

Under proposed terms of reference, the inquiry would look at the regulatory environment surrounding payday lenders, consumer leasing businesses, and what consumer group critics refer to as "debt vultures".

These are businesses such as debt negotiation firms or credit repair agencies, which are unregulated and target customers with debt problems, or those struggling to get finance from conventional sources.

Buy now, pay later schemes such as Afterpay - which consumer groups say exploits a loophole in lending laws - would also be put under the microscope.

Shadow financial services spokeswoman, Clare O'Neil, said the Opposition wanted to stop people entering a "spiral of debt" from expensive payday loans, and the inquiry would look at the financial counselling sector's capacity to service this part of the community.

“I have been speaking with Australians around the country who are victims of misconduct by financial service providers," Ms O'Neil said.

"It is clear to me that there are a range of providers whose conduct was not examined by the banking royal commission who provide financial services to vulnerable Australians."

Gerard Brody, chief executive of the Consumer Action Law Centre, said clients frequently had problems with multiple payday loans. Debt management firms often charged exorbitant fees, he said, and were subject to no regulation.

"If you think the banks, insurers and superannuation funds are ripping people off, they are nothing compared with the exploitative conduct of this sector of the marketplace," Mr Brody said.

Afterpay, which is not subject to responsible lending laws and has taken off in popularity, would also be examined, alongside work the Australian Securities and Investments Commission is doing in this market.

Mr Brody said it appeared that more customers were contacting the National Debt Helpline about Afterpay.

Fiona Guthrie, the chief executive of Financial Counselling Australia, said payday lenders and debt negotiation providers were a significant cause of problems for customers who sought the help of a financial counsellor. These tended to affect lower-income customers the most, she said.

Customers of buy now, pay later services such as Afterpay were also starting to raise some concerns to financial counsellors about this type of credit, Ms Guthrie said.

"If the royal commission has shown us anything, it's that we should not have harmful financial products," she said.

The inquiry comes as the Coalition is accused of sitting on its hands over legislation expected to tighten regulations on the industry.

The Turnbull and Morrison governments have made little progress in 1000 days since the Small Amount Credit Contract and Consumer Lease Reforms bill was first flagged. It sought to introduce a cap on leases equal to the base price of the good plus 4 per cent a month and only allow leases and short-term loans to account for 10 per cent of a customer's net income.

Former assistant treasurer Josh Frydenberg first released the terms of reference for a review of the legislation in August 2015. Four ministers over the course of 1046 days have had carriage of it since .

Stuart Robert, the new minister in charge of the sector, has been contacted for comment.

Greens Treasury spokesperson Peter Whish-Wilson said he welcomed Labor’s bid for a payday lending inquiry but hopes they are genuine about reform after Labor leader Bill Shorten watered down regulations for the industry when he was financial services minister.

"We certainly support an inquiry and we are going to make sure that it goes beyond politics and actually getting some solid reforms in place," he said.

124


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## MarketMatters (17 October 2018)

This will be interesting to watch!!!


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## peter2 (17 October 2018)

My short term opportunity in APT just got smashed by a politician. Thanks for the notice @bigdog


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## galumay (17 October 2018)

Well it was a material risk that had been present since the business model was first outlined. Its one of the main reasons I sat out in the sidelines and watched as others rode the wave! It was only ever a question of when, not if.


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## Sdajii (17 October 2018)

I sold out about two weeks ago when support was being tested (good move!). The chart was absolutely ripe for something like this, and today's nothingburger of a news article triggered it. I bought all my shares back in at close.

Still a bit risky, there wasn't a lot of time between the crash and close to make the analysis of whether it was likely to crash through another layer of support or bounce back up, but I decided to jump in.

I doubt very much that this piece of 'news' represents anything which will legally harm APT at all. If anything it will help by restricting some of the competition, leaving APT a larger potential market, since I really can't see APT doing anything which any regulator would want to stop, but sentiment both of the market in view of this 'news', and the technicals, and also sentiment of retailers considering getting on board could be effected.

Technically, I can't predict what should happen tomorrow. The chart isn't strongly telling me anything, except that it's likely to move strongly one way or the other.


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## Knobby22 (17 October 2018)

CCP Credit Corp got slammed also.


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## aus_trader (17 October 2018)

Knobby22 said:


> CCP Credit Corp got slammed also.



I also just looked like if anyone was spared in this short term lending space and looks like only 1 was left alone.

Stocks that had a bad day include CCP, MNY, CCV, APT and Z1P. Somehow the Radio Rentals operator, Thorn grp (TGA) was spared. This is perhaps because TGA were subjected to so much scrutiny already by investigators for this type of lending practices that price has already fallen so far from the ~$3 highs to the current 60c levels already.

I have had a fair bit of involvement with this sector of the market having had both Cashie's (CCV) and APT's nearest competitor Zip (Z1P) in the Speculative Stock Portfolio

The investigation will be followed with interest as detailed by bigdog, since it could really transform or choke this part of the lending market. I'm not taking any sides because it's a really complex issue: on the one hand it's about letting the free markets to work itself out over long term (as in this case if you burn the customers eventually they'll go elsewhere) or let the politicians and regulators step in to protect the most financially vulnerable in our society.


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## Sdajii (23 October 2018)

It still looks very unlikely the inquiry will do any harm at all, and may even give APT a benefit.

Technically, in my amateur analysis, it's looking really good. A jump up from the closing price on the day of the irrational scare and then four days of trading in a very narrow range, leaving it set to move one way or the other. The chart really doesn't seem to favour the down side, and it seems set for a run whenever it is ready to take off.

The fundamentals are also looking good with more and more retailers getting on board, and the Christmas boom coming up. I hear Barbecues galore in Australia have just started offering Afterpay this week, and several salons/beauty services and dental mobs abroad are now offering it. I'll be in Australia later this week and look forward to checking out the situation at ground zero.


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## galumay (23 October 2018)

Sdajii said:


> The fundamentals are also looking good with more and more retailers getting on board,




Thats not really "the fundamentals", based on the fundamentals its an extremely overpriced business, people are paying a high price based on the narrative which is that eventually profit and cash flow will catch up due to exponential growth and underlying scalability. 

The narrative may play out or it may not, I have no skin in the game, and I certainly hope those who have bought the story are repaid with great long term returns, but its always worth remembering that in the longer term most of these sorts of high growth tech businesses fail to ever meet the expectations of the narrative. The exceptions are the Apples and others that have created long term sustainable and profitable businesses.


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## Toyota Lexcen (23 October 2018)

is Afterpay a payday lender?

when using Afterpay aren't you paying the instalments with credit card, debit card, bank account etc?

you buy goods, Afterpay pays business then you pay Afterpay in 4 instalments with credit card, debit card, bank account etc


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## galumay (23 October 2018)

Toyota Lexcen said:


> is Afterpay a payday lender?




No they are not a payday lender, I think they get lumped in with them a bit because its attractive to low income people with poor saving habits. There is a real concern about the potential negative impact on vunerable people. I guess like any new business that is structurally different to existing businesses, its likely to attract some attention from regulators/legislators. Whether that leads to any negative impact on the business or not is a risk any potential investor has to weigh up.


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## Smurf1976 (24 October 2018)

Sdajii said:


> The fundamentals are also looking good with more and more retailers getting on board



My observation is that the company has already achieved "generic" status in this market. 

If someone comes up with a direct competitor then they're going to face the problem that "After Pay" is already an accepted term. It's one of those things like Biro meaning any ballpoint pen etc.

Just my observation - it's already widespread so any direct competitor would need to do it better not just offering essentially the same thing.


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## Sdajii (24 October 2018)

galumay said:


> Thats not really "the fundamentals", based on the fundamentals its an extremely overpriced business, people are paying a high price based on the narrative which is that eventually profit and cash flow will catch up due to exponential growth and underlying scalability.
> 
> The narrative may play out or it may not, I have no skin in the game, and I certainly hope those who have bought the story are repaid with great long term returns, but its always worth remembering that in the longer term most of these sorts of high growth tech businesses fail to ever meet the expectations of the narrative. The exceptions are the Apples and others that have created long term sustainable and profitable businesses.




Totally fair comment, you're entirely right.

What I meant by the fundamentals (yes, I termed it incorrectly) is that the business is continuing to expand, rapidly adding more and more retailers in Australia and abroad and total afterpaid sales are increasing. Yes, you're entirely right, it is still priced in with an assumption that it will end up larger than it is (which given its current rapid rate of expansion and including recent expansion into foreign markets is all but guaranteed), but absolutely, we're yet to see exactly how large it will get and it does need to grow more to reach the size the market cap suggests.

But in a nutshell, the technicals look nice, and the business operations and continued growth would seem to support a stable or increasing share price rather than a falling one.

Smurf: If I ask to borrow my friend's Bic pen by asking for his Biro, no one will sue me, but if I manufacture pens and brand them as Biros instead of Sdaji Pens, Biro is probably going to make my life very unpleasant. If competitors start using the term 'afterpay' we'll have their arses on toast for breakfast, and even if it enters public vernacular as a general term for any buy now pay later thing, we literally are the only one who can market with that name, so it works brilliantly for us! The name Afterpay was spectacular marketting, and simple as it is, makes things very difficult for competitors. That brand name alone will be worth a fortune, already must be.


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## galumay (24 October 2018)

Smurf1976 said:


> Just my observation - it's already widespread so any direct competitor would need to do it better not just offering essentially the same thing.




I think you are right to an extent, its a small competitive advantage, the name has created a strong brand. The danger I see is existing players with strong brands, Visa, Mastercard, Paypal etc offering the same service for a lower fee to merchants. I can also see competitors offering longer terms like 6 weeks - at the end of the market APT service that will be very attractive.

First mover/disrupter advantage is a funny thing, it quite often doesnt play how you expect in the longer term.


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## Smurf1976 (24 October 2018)

Sdajii said:


> even if it enters public vernacular as a general term for any buy now pay later thing, we literally are the only one who can market with that name, so it works brilliantly for us! The name Afterpay was spectacular marketting, and simple as it is, makes things very difficult for competitors. That brand name alone will be worth a fortune, already must be.



That’s my thinking definitely. The brand name seems to have immediately become entrenched as the term to describe the product, to the point that I doubt many could actually refer to it at all in generic terms without using the word Afterpay.


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## So_Cynical (24 October 2018)

APT is priced for potential and has been since $4.50 at one point a few months back it was trading at a higher multiple than Amazon so someone said, Visa, Mastercard, Paypal etc will buy APT because they would be crazy not too, just crazy not too, its that simple.


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## barney (24 October 2018)

Know nothing about this one but technically the current bleeding should .... and will need to reduce around $11 you'd think …. SP much under that could indicate possible issues we average punters aren't aware of?? 

Just a random observation and with no foundation in the possible fundamentals of the Stock so forgive me if I am totally incorrect as that is a regular occurrence


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## Knobby22 (5 November 2018)

I bought some more at $10.88. Proud of that buy as near bottom. Wish though I had of sold some at $24. Almost did but distracted at work.

I think price will keep rising over the summer.


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## bigdog (8 November 2018)

ASX announcement reported today has kicked the SP up







*8/11/2018 9:30:48 AM  Business Developments



























*


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## bigdog (9 November 2018)

I own APT shares and signed up for the APT APP and have not yet used
-- $400 limit
-- Was given choice of paying by bank account or credit card!
-- Credit card payments could be big concern for consumer law where purchases are reimbursed by bank and additional  purchases are allowed to continue.  
-- Buyer is unable to make payment for credit card charges and interest accumulates
-- Is my understanding correct?

Received email today advising Dentists now signed up


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## Ellen Green (10 November 2018)

So far, the price is in the range of 10.87- 15.58. Moving average 5-day, 20-day, 100-day and 250-day are rising. RSI(14) stands at 50.2.


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## barney (11 November 2018)

barney said:


> technically the current bleeding should .... and will need to reduce around $11 you'd think …. SP much under that could indicate possible issues we average punters aren't aware of??




Fortunately behaving since the above observation …… Chart is definitely healthier than it was but a bit more time required to totally eliminate any potentially unwell Cats


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## bigdog (29 November 2018)

I attend the APT AGM meeting in Melbourne yesterday

Very slick presentation from Afterpay executive chairman Anthony Eisen which is available as ASX announcement (the ASX announcements were posted at meeting and meeting started after completion)

28/11/2018 12:12:11 PM 2018 AGM Chairman & Group Head Presentation (56 pages)

Adoption of Remuneration Report was 20.3% against





All other resolutions were carried in 90+%

The SP kicked on today following report form ASIC

https://www.theage.com.au/business/...ge_busnews_am&instance=2018-11-28--19-31--UTC

*Time to pay? Aussies owe more than $900m on Afterpay-style services*

Christmas came early for the burgeoning buy now pay later sector and its market darling leader Afterpay Touch after the corporate regulator confirmed that its desire to tighten rules would not see it require the companies to act like credit card or loan issuers.

The Australian Securities and Investments Commission (ASIC) on Wednesday issued a keenly anticipated report on the sector showing two million people now use its services with those customers owing more than $900 million as of the end of June.

*In a key finding, ASIC did not recommend that the sector be brought under the National Credit Act, which would compel companies like Afterpay to take steps to ensure the credit it provides is not unsuitable for consumers.*

This is despite concerns from some consumer groups about an explosion in the use of buy now pay later services particularly with millennial customers many of whom are students who are in part-time employment or unemployed.

Instead, the regulator would like to see its mooted product intervention powers – where it can step in to prevent the sale of products – expanded to include buy now pay later providers.

ASIC said around 44 per cent of buy now, pay later customers had an income of less than $40,000 a year and there were already indications of a real risk that such commitments could contribute to financial over-commitment by users.

"We found that buy now pay later arrangements can cause some consumers to become financially overcommitted and liable to paying late fees," said ASIC commissioner Danielle Press.

ASIC also found the providers used "behavioural techniques" to get people to make purchases without carefully considering the costs and that one in six users had either "become overdrawn, delayed bill payments or borrowed additional money because of a buy now pay later arrangement".

Eleanor Brown, 27, is one millennial who uses Afterpay. She works full time, lives out of home and is repaying her HECS debt. She's never owned a credit card but spends up to $120 per month on purchases that fall outside of her monthly pay cycle.

“This time of year especially, my online spending has gone up,” she said. “Afterpay allows me to live above my means.”

Ms Brown has nothing but praise for the service but worries for less responsible users.

This time of year especially, my online spending has gone up. Afterpay allows me to live above my means.

“Once I had a payment rejected but I was notified immediately and they said if I paid by the end of the day I wouldn’t get a late fee. A lot of my friends and colleagues use Afterpay and we’ve never had a problem with it. Maybe someone’s who’s freshly 18 who might go a little bit more crazy.”





Afterpay executive chairman Anthony Eisen.Credit:Elke Meitzel

Around 24 per cent of Afterpay's revenue last financial year came from late payment fees charged to its customers.

"Our revenue model is based on retail partners, not on customer debt. We are not like these other companies and that's been a core value from day one," Afterpay executive chairman Anthony Eisen told investors at the company's annual general meeting on Wednesday.

"There's a whole load of stuff that we do that we don't announce that's related to profiling customers to reduce gross losses and defaults."

Afterpay has introduced a cap on late fees at $10 for purchases under $40 and a maximum of $68 for other purchases. If an Afterpay user defaults on a repayment, their account is suspended.

"The important thing for us is to continue working very closely with Australian lawmakers to explain who we are and what we do," said Mr Eisen.

Two of Afterpay's rivals, Zip Pay and Flexipay, also welcomed ASIC's decision.

The sector still faces a level of regulatory uncertainty with a Senate inquiry underway into buy now pay later businesses alongside payday lenders and debt management firms.


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## sptrawler (29 November 2018)

Who underwrites the defaults bigdog?
Or is the debt carried by the merchant at the point of purchase?


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## Toyota Lexcen (30 November 2018)

Afterpay pay merchant.

Afterpay refunds merchant if a return is made .

Very grey area.

Afterpay buys good, then let's you pay it off. Is it credit?


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## Knobby22 (30 November 2018)

Toyota Lexcen said:


> Afterpay pay merchant.
> 
> Afterpay refunds merchant if a return is made .
> 
> ...



Officially ruled by ASIC to *not *be credit as posted above. It's more like a debit card with delayed payment. In fact it allows people to *avoid* credit cards and all the traps they set.
Read the following from the Chairman.

I_ think it’s important to explain this element of our competitive advantage in more detail as it really is fundamental to our story. Under our business model:


▪ Afterpay’s revenue is based on merchant fees, not on customer debt

▪ We do not make our profit from customers and users

▪ We make more money when customers buy what they can afford, pay on time and stick to their simple instalment plan

▪ When our customers get into trouble, we lose money

This means that for Afterpay, things like responsible spending are more than words. They are fundamental to the success of our business. And this means that we could not be more different to traditional credit products. It’s this difference that has helped us to build trust with our customers, and trust with our retail partners.

And we back this up with our actions.

If we get it wrong, and a customer misses a payment, they cannot use Afterpay again until they settle their account with us. Could you honestly imagine a traditional credit company stopping you from buying anything else or going deeper into debt because you missed a single payment and didn’t pay off discrete items in full?

These are unbreakable rules of our model, our community and our business. These unbreakable rules prioritise customer payment responsibility.

And everything we do incentivises our community to adhere to these rules:

▪ Afterpay is a free service for customers who pay on time

▪ Customers must pay purchases off in full in a short time period – its about budgeting and buying to "own" and not "rent" – you can’t "kick the can down the road" with Afterpay by way of paying us a fee or otherwise

▪ Afterpay is for discrete purchases – not a line of credit

▪ Customers are suspended if a single payment is late – that means bad debt cannot accrue or revolve - and we intervene as early as possible in the debt cycle to stop people getting deeper into trouble

▪ Similarly, late fees – if charged, are minimal, capped and don’t accumulate

▪ And, strict spending caps that start low for first time customers and increase only with demonstrated positive behaviour - and even then the maximum individual purchase limit is capped at $1,500

We know that these rules and incentives work because the data reinforces this point:

▪ Overall Afterpay rejects around 30 percent of the purchase requests we receive.

▪ Approximately 95% of payments received in FY18 did not attract a late fee

▪ Over 90% of monthly transaction volume comes from returning Afterpay customers, which is only possible if these customers use the system responsibly and their payments are up to date.

▪ And over 85% of our customers prefer to pay with debit cards rather than credit cards

Furthermore, our average transaction values and balances outstanding are low:

▪ Our average balance outstanding is just over $121, compared to average Australian credit card debt of over $4,000

▪ Of those customers that have positive balances outstanding >90% of them are less than $500; And

>75% are less than $350_

2.5 million customers, over 20,000 retail partnerships and they are attracting the attention of the biggest and most recognised regional and global brands every day.
The latest results in the USA are exciting and 10% of all Australians now use the service with 10% of all online sales now through Afterpay.

The Afterpay customer growth rate in the U.S. has jumped in the last month, from an already rapid rate. In November, Afterpay U.S. is set to add ~140,000 new customers, which compares to the ~70,000 added in October in that market.

I am officially* going to state that this is *Australia's best tech start up in history*. Last chance to catch the train before it leaves the station forever.

(*in my position of over exuberant poster of the decade  as voted by me)


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## Toyota Lexcen (30 November 2018)

Asic/government probably have no "laws" to stop it.

It's fascinating, afterpay buy the item, give it to customer, then allow it to be paid off.

Are they in the clear because they don't charge interest?


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## peter2 (30 November 2018)

I like that the APT CEO is being proactive and responding quickly to the possibility of a Senate inquiry into this industry. 

I'm continually amazed that there's not been more criticism of the outrageous credit card interest rate (18%) that's been around for ever. Have the banks successfully stifled any criticism?


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## Knobby22 (30 November 2018)

peter2 said:


> I like that the APT CEO is being proactive and responding quickly to the possibility of a Senate inquiry into this industry.
> 
> I'm continually amazed that there's not been more criticism of the outrageous credit card interest rate (18%) that's been around for ever. Have the banks successfully stifled any criticism?




It would definitely be in the banks interest to try to get the government to crimp Afterpay however why would the Government want to piss off Gen Z who use it most? 
Though Liberal and Green  politicians might like to as they both seem to be in suicidal mode at the moment.


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## Toyota Lexcen (30 November 2018)

Why would banks be against Afterpay?


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## Knobby22 (30 November 2018)

Toyota Lexcen said:


> Why would banks be against Afterpay?




Their aim is to get the young onto Credit Cards and expensive debt. They also miss out on the transaction payment if people don't use their Credit Cards. 

I have 4 nieces that use Afterpay and don't have credit cards. My daughter also doesn't have a cc.
( I have 6 nieces, one is still very young, guess what - one of the 6 is in CC debt.)


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## bigdog (7 December 2018)

These directors get it easy!!

ASX ANN   6/12/2018 4:30:10 PM  Change of Director's Interest Notice (David Hancock)

*Sold*:   550,000 for $7,902,130 in aggregate for sales of Shares (before brokerage)
Nil paid for acquisition of Options

*Acquired:* 2,699,087 unlisted options issued under an agreement with David Hancock, with an exercise price of $2.70 per option and expiry date of 1 September 2022, and other terms as approved by shareholders at the Company’s 2018 Annual General Meeting (Options)

*Number held after change:*
Indirect:  
1,350,000 Shares

Direct: 
2,699,087 Options
200,000 unlisted options issued under the entity’s Employee Option  Plan,  with  an  exercise  
price  of $1.00 per option and an expiry date of 31 December 2020.


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## MrChow (7 December 2018)

So if I had decided to start a lay-buy company 4 years ago I could be worth 3 billion dollars? 

That doesn't seem right.


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## bigdog (18 January 2019)

*Market liked the news today*







*ASX ANN today
18/01/2019 9:44:29 AM  Business Developments*




















467


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## So_Cynical (18 January 2019)

20 bucks here we come? if the general market rally continues - risk on, then i cant see why 20 dollars is not on the cards over the next month or so, after all it was a very good announcement today.


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## bigdog (18 January 2019)

So_Cynical said:


> 20 bucks here we come? if the general market rally continues - risk on, then i cant see why 20 dollars is not on the cards over the next month or so, after all it was a very good announcement today.




*So_Cynical $20 is in the ball park*


https://www.moneymorning.com.au/201...hare-price-has-rocketed-11-93-today-asxu.html

18/01/2019
By  Ryan Clarkson-Ledward 

The* Afterpay Touch Group Ltd [ASX: APT]* share price has been the one to watch on the ASX this morning. *Despite a note out of Goldman Sachs today, slashing its price target for the company by 26% to $19.25*, APT has managed to rocket out of the gates this morning.

The payment provider’s share price has climbed 11.93% in the opening hour of trade, putting on $1.70 to trade at $15.95. Current trading price is $15.83.

According to Goldman Sachs, the reduced target priced reflects lower merchant fee assumptions in the US market.

*Afterpay’s share price reflects strong performance*
In an ASX announcement released shortly before open this morning, Afterpay provided investors with its key business developments.

According to the announcement, the company has continued its strong performance through the first half of FY19. Underlying sales globally for the period was over USD$2.2 billion, an increase of 240% from the corresponding period of FY18.

The company also reported strong growth within its user base, having transacted with over 23,000 merchants globally, consisting of 3.1 million active customers within the last 12 months.

According to APT, they experienced a growing average of approximately 7,500 new customer per day over Q2 FY19.


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## bigdog (19 January 2019)

*cofounders Nick Molnar and Anthony Eisen will appear next Tuesday before a Senate inquiry into ‘‘ credit and financial services targeted at Australians at risk of financial hardship’’*

My only criticism of Afterpay is that they allow users to charge their credit card who reimburse Afterpay and customers could find that they are unable to pay the credit card bills!


*Todays AGE report

Afterpay sales boom as late fee income share falls*
https://www.theage.com.au/business/...e-fee-income-share-falls-20190118-p50s6h.html

Booming payments business Afterpay Touch has seen sales on its platform more than double in the latest half to $2.2 billion, as it stepped up its expansion both domestically and into the massive United States market.

Shares in the buy now, pay later platform surged by 14 per cent on Friday, after an upbeat trading update that revealed a record month in December, while saying moves to limit late fees were also starting to have an impact.





Afterpay co-founder Nicholas Molnar, who will appear before a Senate inquiry with co-founder Anthony Eisen next week.Credit:James Brickwood

After it last year launched in the US, Afterpay said its underlying sales in the latest half were up 140 per cent, to $2.2 billion, and it was signing up roughly 7500 new customers a day in the most recent quarter.

The US business had processed $260 million in underlying sales in the first half, and based on this performance the US business was on track to process more than $500 million in underlying sales a year.

In a sign of the large market potential in America, Afterpay said it took a much longer 28 months to generate $260 million in underlying sales when it first launched in Australia.

Buy now, pay later schemes allow customers to receive their goods before they have paid for them, but they are not regulated under credit laws.

Amid scrutiny of its business model by consumer groups and regulators, Afterpay - which does not charge interest, but does impose late payment fees -  said it would cap late fees at 25 per cent of the purchase price or $68, whichever is higher.

On Friday, the business said late fees as a percentage of its total income had fallen to less than 20 per cent in the latest half, compared with 25 per cent in the last financial year.

The trends comes before co-founders Nick Molnar and Anthony Eisen will next Tuesday appear before a Senate inquiry into "credit and financial services targeted at Australians at risk of financial hardship".

The business model has proven highly popular with younger consumers who are increasingly shunning credit cards, but it has come under scrutiny amid concerns some customers are being extended credit without sufficiently rigorous checks.

Afterpay was created to provide customers with a better alternative to traditional credit products.

Afterpay also said it expected that net transaction losses from consumers not making their payments would be at the lower end of its target range of 0.6 to 1 per cent.

"Afterpay was created to provide customers with a better alternative to traditional credit products," the company said.

"It is a free service if customers pay on time and our business and operating model is designed to
champion the customer and promote responsible customer spending."

Afterpay shares jumped 14 per cent to $16.14 on Friday and have risen by 115 per cent in the last year, giving it a market capitalisation of about $3.7 billion.

‘It is a free service if customers pay on time.’


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## luutzu (19 January 2019)

Please feel free to correct me [as if I need to ask]....

But from my understanding, APT's a losing business model.

It's taking on too much risk for very little, very marginal, returns.

If interest rates, or APT's funding costs rise, shareholders better hope they can pass it on to the retailers through rising fees.

The move to the US can be problematic. Don't they have personal bankruptcy there where people can just go broke and it won't follow them [beside a bad credit record?]. 

So the increase "sales" reported is just increased liability.


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## Knobby22 (19 January 2019)

Don't forget they are opening in Britain so it will definitely increase hence their new finance arrangements.

They charge the retailer between 6 and 8 % of the sale.
They get it back the cash  in installments over 6 weeks. Pretty good return in my view. Better than the retailer who has to buy the stock, display it and pay all costs. 
2.2 billion in sales during recent 6 months, steadily increasing. You do the maths.

They are making a profit but obviously this much growth needs cash flow.
A bad credit record in the US is a big thing and since they won't lend you much at first (from memory $150), why would you get one for that?


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## galumay (19 January 2019)

One thing I wonder is how many retailers have raised their prices for all customers to offset the cost of providing the Afterpay service? Obviously APT claim that the extra cost to business is offset by increased sales, I very much doubt that and expect where they can retailers will be increasing prices to cover the cost, just as they did with credit cards (with much lower fees).

I deliberately avoid retailers who promote using Afterpay just on suspicion that I am likely paying extra.

The hype the company puts out always makes me a little uncomfortable with the business, eg "Its a free service if the customer pays on time." - its not free, in all liklihood we all pay, even those who dont use it. Its just that the service charge is indirect because in the first instance the retailer pays for the service.

None of the above is really anything to do with the investibility of the business, but it probably adds to my negative perception of the business as an investment.

Hopefully the believers see a nice run up in the share price this year.


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## luutzu (19 January 2019)

Knobby22 said:


> Don't forget they are opening in Britain so it will definitely increase hence their new finance arrangements.
> 
> They charge the retailer between 6 and 8 % of the sale.
> They get it back the cash  in installments over 6 weeks. Pretty good return in my view. Better than the retailer who has to buy the stock, display it and pay all costs.
> ...




Saw APT's boss doing a presentation for the ASX thingy... he said they charges small retailers upto 6%, the bigger guys 3.5% or so... so average margin is 4.1% on retailers.

In FY18 [?] its average costs of interest [charged to APT] was 3.6% or so. There's some preference/convertible at 7.2% but that's for some $46M so I guess not much. 

Assume that interest rate will rise this FY19, or at least FY20... just to reflect the recent rises in the US.

So the cost they charge retailers vs the interests they pay to their bankers would break even.

SInce they don't charge interest on most of their members. I think they charge if you use credit cards instead of debit, but that's after 56 days? 

Basically, they make money from late payment fees... and so far, <25% [according to their presentation] are late. 

Question is, will the late fees be enough to turn a profit on? Assuming the initial roll out and retailer/member acquisition eventual costs nothing. 

My reading of their stats says that default was 1%, they allowed for 1.5%. Profit from late fees around 2.6%. Net profit on all these activities would be 1.1% to 1.6%?

Expansion into the US could be trouble. 

Remember that some 60% of them could not afford a $1,000 emergency. 

so it's not a big deal to offer them no-check credit upfront. 

What happen when an emergency occur? They declare personal bankrupt? Or delay and delay it costs APT more to chase up the payment?


Just being cautious... $3.8B for a yet to be profitable business that's lending to anyone with an ID over the internet, taking on all the liabilities with each "sales". 

It's not hard to lend people interest-free money. Not hard either to charge 4% to retailers when you pay in full and move their goods quicker. 

So the increase sales and rapid adoption by retailers is almost a given. Difficulties is whether or not interest rate costs can be passed on to retailers if the bankers demand higher rates; whether or not defaults are difficult and collection cost-effective.


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## Smurf1976 (19 January 2019)

galumay said:


> None of the above is really anything to do with the investibility of the business, but it probably adds to my negative perception of the business as an investment.
> 
> Hopefully the believers see a nice run up in the share price this year.



Long term I have a lot of doubts about it for the reasons you and others have mentioned.

Also, whilst I previously thought it would take longer, reality is that competitors are already active and becoming established so the "first mover" advantage won't last long.

In the short term though, well it all looks positive but not as a "bottom drawer" stock.


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## sptrawler (19 January 2019)

luutzu said:


> Saw APT's boss doing a presentation for the ASX thingy... he said they charges small retailers upto 6%, the bigger guys 3.5% or so... so average margin is 4.1% on retailers.
> 
> In FY18 [?] its average costs of interest [charged to APT] was 3.6% or so. There's some preference/convertible at 7.2% but that's for some $46M so I guess not much.
> 
> ...




And here is me, thinking you had a social conscience and were worried about the little guy getting ripped off.


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## sptrawler (19 January 2019)

Smurf1976 said:


> Long term I have a lot of doubts about it for the reasons you and others have mentioned.
> 
> Also, whilst I previously thought it would take longer, reality is that competitors are already active and becoming established so the "first mover" advantage won't last long.
> 
> In the short term though, well it all looks positive but not as a "bottom drawer" stock.



Could be a very good in / out, as long as one keeps ones eye on the big picture. lol


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## luutzu (19 January 2019)

sptrawler said:


> And here is me, thinking you had a social conscience and were worried about the little guy getting ripped off.




Yea true. Maybe I should've just left APT carry on with their attempt at screwing the cash-strapped millennial with "free money", not realising they're the one who's getting it.

But yea, the founders and early investors have certainly done very well for themselves. Soon enough more idiotic fund managers will hop on board and possibly lose their pensioners a few billions.


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## luutzu (19 January 2019)

sptrawler said:


> Could be a very good in / out, as long as one keeps ones eye on the big picture. lol




A $3.8B company that's losing money, whose business is to lend money without interest or collateral. 

I shouldn't laugh 'cause its stock might double in a real hurry though. THe market seem to like "sales" and growth and cooler way to charge on a master card.

How come whenever I gamble on a spec I always lose money and some people could just double theirs without really trying. LIfe's unfair Homer.


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## luutzu (20 January 2019)

Here's a contradiction I see in APT's business model. One I believe will increase its risks as it tries to de-risk.

Say APT's interest expense goes up. Up due to higher RBA/Fed/Bankers demanding higher rate.

To pass on this risk they could try to raise that merchant/retailer's margin. Can't really increase the late fees too much, can't really start charging interests on members as that would change their business model.

Small retailers are currently being charge up to 6.5%... now, if retailers agree to any higher fees than that it's likely due to retailing being in pretty bad shape. Why would you agree to further discounts right?

When in bad condition, meaning they would have also mark down their merchanise, generally, already.

So retail is in a bad way for retailers to agree to take on more cost through APT.

Retail is slow because the general economy is tough. Tough economic condition increases the likelihood of default. Or late payment. 

Since APT's model canned members who's late or defaulted; they cut off their source of revenue. Only opening business to those new, or those more capable of paying. 

New increase risk; those who can pay will pay and so won't make APT much money anyway.

Share price will likely rocket up. Over the longer term though, business model is flawed.


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## Skate (20 January 2019)

luutzu said:


> Here's a contradiction I see in APT's business model. One I believe will increase its risks as it tries to de-risk.
> 
> Say APT's interest expense goes up. Up due to higher RBA/Fed/Bankers demanding higher rate.
> 
> ...




I would like to have my say about (APT) but I'll use APT as an example for the 'Dump it here' thread with chart references.

Found here: https://www.aussiestockforums.com/threads/dump-it-here.34425/page-99

Skate.


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## peter2 (20 January 2019)

Interesting, thank you for your thoughts @luutzu.  

How can a CEO state something that's not true without any public criticism? One would think the short funds would be all over this and making very public statements to support their short position.


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## Knobby22 (20 January 2019)

Had a look Skate,  trouble opening first image on my phone, on holiday at present.

I apologise for getting charge percentage wrong, did it by memory as not at home.

As Skate has shown, you have to look at the action.

I am bemused to see resistance based on it costing millenials more. In fact it allows them to avoid the credit card traps hence the banks are lobbying the government to limit them. 
1 in 4 Australian millenials have used Afterpay including many of my nieces, who don't own credit cards. One did use them and got the debt as the bank desired.

There are definitely risks e.g. fraud, sure, but also may positives such as continuing success causing a takeover offer by say MasterCard or Google!
The brand name limiting any competition. 
The continuing selection of the users that do pay back and the permanent removal of those who don't pay back in time reducing bad debts which appears to be occurring.

Some of the comments sound like old men in gentlemen's club poo pooing the internet as a passing fad.
Look at the charges for Amercan Express, PayPal etc. Many US companies make losses in the early years to build market share, I am sure you know many examples.


But you don't have to understand the business, as Skate shows technical analysis is enough. There will
 be times to sell and times to buy.

One of my selections for this year's yearly comp. I may be wrong but to me it looks like a real winner.


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## luutzu (20 January 2019)

peter2 said:


> Interesting, thank you for your thoughts @luutzu.
> 
> How can a CEO state something that's not true without any public criticism? One would think the short funds would be all over this and making very public statements to support their short position.




It's just my opinions. So please don't sue me 

Maybe what mgt said there is technically true [literally?]. In that it costs them more money to go collecting late fees and non repayment. 

But if that is true, and I suppose the hourly costs to track down the member, writing them warning letters and threats of suing might end up costing more if they pay on time. 

If true that they lose money, as in making losses, from collecting late fees... business will be in trouble.

See below... 4 to 4.1% is their annual (merchant) revenue. That's the actual revenue if we think of it like a business. 

The $2.1846B in "sales"... that's just money they lent to their members. Money that's owed to APT from their members.

i.e. Their members spent $2.1846B at the shops. APT paid, on average, $2,184.6M - 88.3M = $2096.3. Thus, gaining a revenue of $88.3M. This is APT's actual "sales", not the $2.184B or the $2.096B it paid out.

If business were to operate as APT described above there... that is, it shuts down its late or defaulted members, leaving only the "good" ones who pays on time [i.e. not incurring any fees for using APT]... if business work out that way, then...

Best case scenario for APT is that, over time, all its default [close to 0%], with interest expense, recover costs; all the corporate overheads, the IT and admin, the sales and executive pay... all that will be lower than those collected from the merchants/retailers. 

I can't imagine retailers giving APT 10% or 15% off just to move the stocks. I mean, couldn't they themselves do that?

If merchants were to raise the price to cover the extra costs for those APT clients... well they'll not attract the cash or other customers who could pay; might not even attract APT member themselves because why should anyone pay a higher marked price then the shop or online store next door?

Just my opinions. I don't short the stock and such.


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## luutzu (20 January 2019)

Knobby22 said:


> Had a look Skate,  trouble opening first image on my phone, on holiday at present.
> 
> I apologise for getting charge percentage wrong, did it by memory as not at home.
> 
> ...




It's not hard to pay on people's behalf with little to no checks, no collateral.

I read the history of American Express before, how it came up with travellers' cheque, got into the new credit business. 

The way they make money is not how APT is making theirs.


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## luutzu (21 January 2019)

luutzu said:


> Please feel free to correct me [as if I need to ask]....
> 
> But from my understanding, APT's a losing business model.
> 
> ...





Oh ey, I've made an error with my maths there. Was pointed out by someone...

The Merchant revenue of $88M is only 4% if it's over the total amount loaned out [2.1B+]... But APT churn over its capital [assets? loan book?] some 42days a year or so... So the $2B "underlying sales" is really only some $350M, not the entire amount of $2B, costing 3.8% or so.

Sorry about that... 

However, and this, ladies and gentlemen... might scare you out of APT.... 

First... not that scary I supposed.... The total Revenue would be $142M

After operating expenses, exclude any one-offs and bonuses or mgt incentives, net operating income would be some $27M. Over that $350M loan book it's about 11% return. 

If we use the total equity, or the total assets, operating return will halved or so.







*This now get scary... or it coud be just me.
*
Default rate is not really 1.5%. It's about 1/4 of the company's revenue. 

That is, of the money APT is to collect, some 22.87% [or $32.5M] is assumed impaired.


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## tinhat (21 January 2019)

An interesting business and interesting analysis being provided here. I see afterpay being offered on so many e-commerce websites now. A few thoughts:

1. Reading the company's last presentation it is easy to see that this consumer finance product appeals to compulsive instant gratification consumption (hairdressers) as well as bigger ticket spending on things that consumers might try and put off but which are not discretionary in the long run (such as dentistry). For merchants it's a no-brainer.

From the 18 Jan presentation:



> Afterpay is progressing to formal documentation with two major US investment banks for a total facility size of up to US$300 million. It is anticipated that the facility will be completed in H2 FY19. A US$300 million facility is able to fund well in excess of US$4 billion in annual underlying US sales. While subject to final documentation and relevant final approvals, the term sheets received to date reflect efficient and flexible funding proposals similar in form, term and pricing to the existing $500 million Australian and NZD$20 million New Zealand facilities provided by National Australia Bank, Citigroup and ASB.




A couple of things here:

Firstly, the business model is relying on a very high velocity of turn-over of finance, as luutzuu identified, which is key to afterpay achieving their desired return on lending out the money it has borrowed. It's aiming to generate merchant fees from turning over the money it borrows 13.33 times per annum.

There is the obvious risk with the business model that its cost of borrowing (interest rates) go up. The next credit crunch may be a way off yet, but it will come.

Then there is the risk of bad and doubtful debts, defaults by customers. This is heightened by business model that is requiring such a high velocity of turnover of the credit. As soon as a borrower is late or defaults in paying their debt that money can't be lent out again but afterpay have to pay interest on the borrowings. So any credit crunch during an economic downturn could have significant impacts on the business model.

On the positive side, I would imagine that there is a lot of value to be captured and monetized from their customer data as a market intelligence and promotional asset alone.


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## luutzu (21 January 2019)

tinhat said:


> An interesting business and interesting analysis being provided here. I see afterpay being offered on so many e-commerce websites now. A few thoughts:
> 
> 1. Reading the company's last presentation it is easy to see that this consumer finance product appeals to compulsive instant gratification consumption (hairdressers) as well as bigger ticket spending on things that consumers might try and put off but which are not discretionary in the long run (such as dentistry). For merchants it's a no-brainer.
> 
> ...





Most of the metrics they're pushing in their presentations and ads aren't metrics investors should use to measure the APT's business performance. 

It's pretty easy to pay for people's purchases, not that hard for them to accept your offer when the offer doesn't require any probes or collateral.

Likewise, not hard to get a retailer to adopt if all they need to do is give you about 4% discount. I mean, if I want an item enough but could live without it, I just negotiate with the shop and most often could easily get 5 to 10% off. 

APT's management make it out like their Australian "partners" wanting them to move overseas is a great thing. Come on man, any idiot would invite you to move your operations to where you'll help move their stocks for a mere 4% discount. Most stocks would be discount by that, or more, if they aren't moved quickly anyway.


Please check my maths, 'cause if it's correct, about one quarter of APT's revenue is defaulted. That's very high for any business right?


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## Knobby22 (22 January 2019)

luutzu said:


> Most of the metrics they're pushing in their presentations and ads aren't metrics investors should use to measure the APT's business performance.
> 
> It's pretty easy to pay for people's purchases, not that hard for them to accept your offer when the offer doesn't require any probes or collateral.
> 
> ...



They said this loss is reducing as a total percentage. When the next half results get released we shall see. If you are late paying they never lend to you again so in the Australian market the bad debts would be expected to reduce. The cost of doing business per transaction should also reduce as the business solidifies in the US and UK.

 The fact that the banks are lining up to lend should give comfort as I am sure they are doing due diligence.

The worries I have are, systemic fraud, failure to gain market share in the U.S. and UK as they have done in Australia due to new competition. Basically they have first mover advantage, with developed software and a great name.

Definitely speculative but an exciting prospect.


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## galumay (22 January 2019)

Knobby22 said:


> The fact that the banks are lining up to lend should give comfort as I am sure they are doing due diligence.




Comedy gold!


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## HelloU (22 January 2019)

luutzu said:


> Most of the metrics they're pushing in their presentations and ads aren't metrics investors should use to measure the APT's business performance.
> 
> It's pretty easy to pay for people's purchases, not that hard for them to accept your offer when the offer doesn't require any probes or collateral.
> 
> ...




per the discount ...... odds are the non-user customers will also help subsidise the users ....
"reverse search" is happening. Users are beginning to search for products only via afterpay sellers. Sites are being designed for this outcome. 

young peeps do not like credit. they like debit. and like to have their money in their debit account longer.


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## luutzu (22 January 2019)

HelloU said:


> per the discount ...... odds are the non-user customers will also help subsidise the users ....
> "reverse search" is happening. Users are beginning to search for products only via afterpay sellers. Sites are being designed for this outcome.
> 
> young peeps do not like credit. they like debit. and like to have their money in their debit account longer.




I think people of all ages like money in their pocket more than out of it 

The figures, receivables, bad debt etc., are all heading the wrong way.

THe only thing that's growing is the "underlying sales" i.e. more members joining, using more. 

But when you have increased users with a model where, so far anyway, the default rises with increased "sales"... that's just asking for bigger losses.

Noticed bad debt to receivables was 3.15%. It's 12.83% in FY18

Sales gained 3.89x while bad debt gained 4x over same period. i.e. default slightly worst, not better with scale.

Note too the gain in late fees... 4.65x as underlying sales gained 3.89x. 

Note write down also 6.97x vs revenue or sales gain.

So more of its members are defaulting; more are paying late fees.


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## luutzu (22 January 2019)

galumay said:


> Comedy gold!




Anyone ever told you you're a bit of a prick?


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## luutzu (22 January 2019)

Knobby22 said:


> They said this loss is reducing as a total percentage. When the next half results get released we shall see. If you are late paying they never lend to you again so in the Australian market the bad debts would be expected to reduce. The cost of doing business per transaction should also reduce as the business solidifies in the US and UK.
> 
> The fact that the banks are lining up to lend should give comfort as I am sure they are doing due diligence.
> 
> ...




Speculations are always exciting though 

I hear lots of people are very happy with AfterPay... while that might sound like it's a good thing, not really when your business is lending them money.

I mean, you'd want your customers to be cursing at you when you lent them money right? Not bragging about how it's so awesome.


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## tinhat (22 January 2019)

luutzu said:


> Please check my maths, 'cause if it's correct, about one quarter of APT's revenue is defaulted. That's very high for any business right?
> 
> View attachment 91537




Page 11 of their annual results presentation also gives a good summary:






From how they present their figures I agree with your calculations that the impairment expense of $32.6m represents about:

28.6% of gross revenue of $113.9m,
22.9% of gross earnings including other income of $142.3m or
38% of gross profit after costs of sales of $85.7m.
Looking back at the statement from their presentation which I quoted above, the whole business model appears to be based on a very high velocity of turn-over of the credit they extend to their customers.

They state:


> A US$300 million facility is able to fund well in excess of US$4 billion in annual underlying US sales.




They are seeking to turn over the amount they give out as credit at 13.33 times per annum; which at a fee of 4% per transaction equates to a target return on funds deployed as credit of 53% per annum. In other words, for every $100m of capital allocated to credit finance they are seeking to finance $1.33b of transactions @ 4% return (merchant fee), which on $100m of capital would yield $53.3m in merchant fees per annum.

Now let's model the business from the point of view of someone looking to provide the debt financing they are seeking to raise. Let's look at the business model, based on the reported earnings and expenses and using the assumption they provide that $100m of capital deployed will finance $1.33b of transactions generating a gross revenue of $53.32m p.a. For ease of analysis of the figures I am pro-rata scaling all the reported expenses to fit into a modelling a deployment of $100m as finance capital.






Like Luuzuu, I'm not sure whether the revenue figure they give comprises just the 4% merchant fee and whether late fees are therefore included in the other income figure, which is not included in the calculations above. Can anyone clarify this? Because it might be that the late fees collected balance out a substantial amount of the impairment cost.

Obviously, you can't pro-rata scale fixed overheads in the real world as I have done in the model above, but it is just easy to scale the figures to something that is easier to analyse. Furthermore, you would need to remodel the indirect expenses (overheads) into any forecast as you would expect them to reduce substantially as a percentage of sales revenue as the business scales.

The point I am making, as stated earlier, is that the business model relies on a very fast velocity of turnover of the credit (forecast to churn over 13.33 times per annum). At a 4% merchant fee per transaction this is central to the business model. It is important to keep this in mind because any increase in bad debts can be expected to drag down that velocity of credit churn and thus will impact the revenue stream. Any shortfall between late fees collected and outstanding payments reduces the amount of finance available to churn over as credit for the next transaction and the business model is for that money to churn over every four weeks! In other words, the business model appears to be very sensitive to any change in bad debts. Probably much, much more than a traditional consumer finance model.

On the plus side, I can imagine this business not needing to generate any return on the funds deployed as credit as I expect there to be potentially more value in using customer data as market intelligence and opportunities of working with merchants on sophisticated direct marketing through the platform.

PS: *I'm having such a hard time writing this post. I don't understand how the image attachment system works or how to insert a table into the text!


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## tinhat (22 January 2019)

Just to add to the above, I don't know much (anything!) about the finance industry but when they say:


> A US$300 million facility is able to fund *well in excess of* US$4 billion in annual underlying US sales.




We can assume that in practise that cash is not going to actually flow through their books at a velocity of 13.33 times per annum. They are, no doubt, going to rely on a fractional system whereby the actual cash flow is probably going to be much less than the amount of credit that is circulating on paper. For example, how long do they delay settling with the merchant?

This is a business I would imagine you would really need to keep a close eye on the cash flow against credit on the books, especially if any problems get papered over through raising of additional funds to finance growth, because if things are going wrong it could be all too late by the time the investors find out. In a credit crunch and this business could well be burnt toast.


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## So_Cynical (22 January 2019)

Nice work Hat - good reading.


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## galumay (22 January 2019)

So_Cynical said:


> Nice work Hat - good reading.




+1, some great 2nd level thinking there!


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## tinhat (22 January 2019)

So, I've just found out that afterpay require 25% upfront payment from new customers but repeat customers don't have to make their first repayment for two weeks. So, assuming that for new customers afterpay collect the 4% merchant fee on 100% of the sale but only finance 75% of it, then, depending on the mix of new to repeat customers, that will adjust down that velocity multiplier of 13.33 I calculated above, potentially reducing it to a potential velocity of 10x annualised if all transactions are by new customers. Also, the higher the proportion of transactions completed by repeat customers, then in theory the lower the risk of default and bad debt.


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## Toyota Lexcen (22 January 2019)

is there any info regarding debit card or credit card usage?

so many people live pay week to pay week


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## Knobby22 (22 January 2019)

Toyota Lexcen said:


> is there any info regarding debit card or credit card usage?
> 
> so many people live pay week to pay week



According to Afterpay over 90% of users make repayments through a debit card. Source Mozo advice site).
I agree paying down the payments through a credit card is a recipe for disaster.


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## luutzu (22 January 2019)

Toyota Lexcen said:


> is there any info regarding debit card or credit card usage?
> 
> so many people live pay week to pay week




I think in the FY18 presentation they were saying that 85% of members uses Debit. So 15% using credit.

Read somewhere that AfterPay does charge interests on credit users. After some 56 days or so.


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## luutzu (22 January 2019)

tinhat said:


> So, I've just found out that afterpay require 25% upfront payment from new customers but repeat customers don't have to make their first repayment for two weeks. So, assuming that for new customers afterpay collect the 4% merchant fee on 100% of the sale but only finance 75% of it, then, depending on the mix of new to repeat customers, that will adjust down that velocity multiplier of 13.33 I calculated above, potentially reducing it to a potential velocity of 10x annualised if all transactions are by new customers. Also, the higher the proportion of transactions completed by repeat customers, then in theory the lower the risk of default and bad debt.




Maybe more risk of default, not less.

If users want to play AfterPay, they might go ahead and repay all the dues on time. Doing so give them more credit from APT right? The better the repayment, the more afterPay gives... then you take that couple grand or whatever. 

For honest and law abiding citizens, lower outstanding debt are easier to repay. The higher it is, the more difficult it gets. So if a lost job or didn't plan proper. Could risk high fees and default.


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## Smurf1976 (23 January 2019)

tinhat said:


> In a credit crunch and this business could well be burnt toast.



I certainly agree with your assessment that there are vulnerabilities in this business. 

What the customers do is one thing. What happens with broader credit markets is another. What governments may choose to regulate is another. 

That said, short term at least there's plausibly value in the concept, the tech, data analysis and so on.


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## tinhat (23 January 2019)

Smurf1976 said:


> I certainly agree with your assessment that there are vulnerabilities in this business.
> 
> What the customers do is one thing. What happens with broader credit markets is another. What governments may choose to regulate is another.
> 
> That said, short term at least there's plausibly value in the concept, the tech, data analysis and so on.




Despite my concern over the long term viability of the business model, I do agree that with you that this could fly in the short to medium term. I notice there is a gap in the chart between $14.45 and $15.10. I'll add this one to the watch list.


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## bigdog (23 January 2019)

News article about yesterdays Senate credit and financial services hearing 

The next meeting is tomorrow
24/01/2019  9:00AM - 12:30PM AEDT
House of Representatives, Standing Committee, Economics (Credit and financial services targeted at Australians at risk of financial hardship)


https://www.news.com.au/finance/mon...g/news-story/5aaf3c804cc62b1ca2e47257429e5e73

*Afterpay, Zip Co execs defend companies at Senate hearing*
An ad encouraging “broke” Aussies to use Afterpay to “treat themselves” has been savaged by the buy-now, pay-later provider.

Stuart Condie
AAP January 22, 20193:34pm

Afterpay executives say they were “absolutely distressed” by a retailer’s advertising campaign that encouraged “broke” consumers to use their service.

The ASX-listed buy-now, pay-later provider says it threatened to withdraw service from the retailer when it became aware of the advert last year, and would have severed ties had there been any repeat.

The ad in question encouraged “Broke AF” consumers to use Afterpay to “treat themselves”.

Appearing before MPs as part of an inquiry into credit and financial services targeted at those at risk of financial hardship, Afterpay executive chairman Anthony Eisen said the company had beefed up monitoring to ensure retailers complied with its efforts to ensure struggling consumers do not take on more debt.

Mr Eisen said the ad was unacceptable and contrary to the values of a company that derives 80 per cent of its income from retailers rather than consumers.

“We were absolutely distressed when we (were) first made aware of that campaign,” Mr Eisen said on Tuesday.

“There is nothing whatsoever associated with that campaign that was supported, endorsed or acquiesced (to) by Afterpay in any way.”

The cost to consumers in late fees for Afterpay — a modern form of lay-by — is capped at $68 or 25 per cent of the cost of the goods or service, whichever is smaller.

Afterpay says late fees are not designed to generate profit and are a genuine estimate of losses incurred as a result of late payments.

The company’s submission to the inquiry said it “promotes responsible spending and seeks to offer a credible alternative to credit products.”

It has largely been used for consumer goods, but Afterpay acknowledges it is now being used for other services such as dentistry.

“We know that Millennials have one of the lowest participation rates in private health and general dental is not covered by Medicare,” Afterpay’s submission said.

“Our first partnership is with Primary Dental and it has proven extremely popular, with thousands of patients opting to pay via the new method since launch.”

Rival Zip Co, which also appeared before MPs, said it was created due to consumers’ unhappiness over the high cost of credit cards and endeavoured to act responsibly.

The company does not allow customers to use the service to pay off other debt.

“From day one, we have tried to be one of the most ethical players in our segment,” chief executive Larry Diamond said.


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## CNHTractor (24 January 2019)

Marcus Padley writes in his newsletter today:

_Seems never a day goes by without *Afterpay* (APT) in the media. This time the SMH and The Age are carrying a story on the company accessing electoral registers for credit checks. The company has done nothing illegal in this and is a result of changes the government brought in to help authorities track money laundering and terrorism. APT is not the only company using the Illion (formerly Dunn and Bradstreet) data service. Betting agencies also use it as well as other credit providers, David Jones, Nike and Officeworks. The media seems to enjoy trying to take APT down. It has so far survived the Senate grilling and has stressed its responsible practices and business model. Yet another storm in a Tea Cup for the company._


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## HelloU (24 January 2019)

HelloU said:


> per the discount ...... odds are the non-user customers will also help subsidise the users ....
> "reverse search" is happening. Users are beginning to search for products only via afterpay sellers. Sites are being designed for this outcome.
> 
> young peeps do not like credit. they like debit. and like to have their money in their debit account longer.



and direct thru nab app ..........


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## bigdog (25 January 2019)

Today's Herald Sun - update on yesterdays govt hearing "Credit and financial services"

ASIC GENTLE ON ‘PAY LATER’
Herald Sun - Friday, 25 Jan 2019 - Page 59

FEARS of a crackdown on the buy-now , pay-later industry have eased after the corporate cop told a Senate committee a light regulatory touch through the proposed expansion of its product intervention powers was a sensible first step. 

Australian Securities an Investments Commission senior executive leader Michael Saadat told the committee, which is inquiring into the extension of credit to vulnerable Australians, that the reform would enable the regulator to address any consumer harm by forcing providers to adopt more stringent safeguards. 

“If consumers are (still) experiencing bad outcomes, we’d recommend further reform,” Mr Saadat said yesterday. 

A gulf this week emerged between industry leaders Afterpay and Zip over the most appropriate regulatory framework. 

ASIC’s position is supported by Afterpay. 

Zip, however, proposed a tougher approach incorporating a scaled-down version of the responsible lending obligations that apply to mainstream lenders. 

Chief executive Larry Diamond was yesterday optimistic Zip’s framework would be adopted. 

“We support increased oversight, and the granting of the product intervention power is a sensible move,” Mr Diamond said. 

“We’d hope under that power that ASIC would look at some minimum standards for the sector, and we’d be very happy to work in consultation with ASIC on that.” 

Mr Diamond told the committee real-time bank statements were used to verify income and expenditure, and the company did not target customers at risk of financial hardship.


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## So_Cynical (25 January 2019)

Bell Potter: Our analysts share their outlook and top stock picks for 2019.

APT Price target of $23.63 ~ one of a few stocks that get a mention.

https://www.belldirect.com.au/smart..._direct/pdfs/Analyst_Stock_Picks_for_2019.pdf


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## leyy (26 January 2019)

There is a good I'm depth article that really illustrates the big picture of afterpay's business model and it is about building a platform / market place using big data to connect retailers and merchants to consumers.

Think of Amazon, eBay, air bnb, uber and Facebook.

Think of the marketing and advertising opportunities in the future for retailers. 

The biggest difference is that it won't be in direct competition with the retailers but more of a another distribution channel with ample marketing opportunities.

It will be critical for afterpay to be able to shift and pivot to this sustainable model.

I think there is real potential here long term.


https://www.afr.com/business/bankin...ng-retailers-with-millennials-20190125-h1agzt

Cheers
Leyy


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## bigdog (26 January 2019)

https://au.finance.yahoo.com/news/afterpay-share-price-charges-higher-015119754.html

Article Friday Jan 25

*Afterpay share price charges higher as regulatory risk subsides*
Afterpay Touch Group Ltd (ASX: APT) share price has charged 3.78% this morning as the threat of regulation appears to be waning. At the time of writing, Afterpay shares were trading at $16.19 per share following this week’s grilling of “buy now, pay later” chief executives from both Afterpay and rival *Zip Co Ltd * (ASX: Z1P)." data-reactid="22">The *Afterpay Touch Group Ltd * (ASX: APT) share price has charged 3.78% this morning as the threat of regulation appears to be waning. At the time of writing, Afterpay shares were trading at $16.19 per share following this week’s grilling of “buy now, pay later” chief executives from both Afterpay and rival *Zip Co Ltd * (ASX: Z1P).

Now boasting a market cap of $3.65 billion, the biggest risk to Afterpay’s growth trajectory has always been the looming threat of regulation by the likes of ASIC if the company was deemed to be a credit provider. This latest Senate inquiry has been scrutinising the business model of Afterpay and its fellow competitors, and looking at options for further regulation in the “buy now, pay later” industry.

Afterpay strenuously denies that it is a credit provider, as its business model does not actually extend lines of credit to its customers. Instead, customers pay off their purchase in four equal instalments over a set period of time and are subject to pre-determined “late fees” rather than interest expenses seen on traditional credit products such as credit cards.

Afterpay saw stratospheric growth in 2018 as its share price exploded on the back of consistent outperformance on its sales numbers and a successful expansion into the USA. The share price closed the year out at $12.40, a 1-year increase of a tidy 94.36% for investors in one of the big success stories of 2018.

I think the tone from ASIC in the latest round of Senate hearings indicates the regulator may push for greater supervisory powers without restricting the current business model of Afterpay. This thesis is also supported by the corporate regulator’s report just months ago that found that powers to intervene in the sector should be satisfactory rather than regulating Afterpay under the much more restrictive Consumer Credit Protection Act 2009.

Markets appear to be on the same wavelength in this regard, with this morning’s early gains indicating that the upwards trajectory for Afterpay could be set to continue ahead of its mid-year results release in February.


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## tinhat (26 January 2019)

tinhat said:


> On the positive side, I would imagine that there is a lot of value to be captured and monetized from their customer data as a *market intelligence* and* promotional asset *alone.






tinhat said:


> On the plus side, I can imagine this business not needing to generate any return on the funds deployed as credit as I expect there to be potentially more value in using customer data as market intelligence and opportunities of working with merchants on sophisticated direct *marketing through the platform.*






tinhat said:


> Despite my concern over the long term viability of the business model, I do agree that with you that this could fly in the short to medium term. I notice there is a gap in the chart between $14.45 and $15.10. I'll add this one to the watch list.






leyy said:


> There is a good I'm depth article that really illustrates the big picture of afterpay's business model and it is about building a* platform / market place using big data to connect retailers and merchants to consumers*.




This is the sort of sharing of info and ideas that makes these fora worthwhile.

My  thinking is that underlying the model is a valuable technologically driven marketing platform (in the old people's speak, "direct marketing") business.

The risk is the financing model, my perceptions of which precede this comment.

Happy invasion day.


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## luutzu (27 January 2019)

leyy said:


> There is a good I'm depth article that really illustrates the big picture of afterpay's business model and it is about building a platform / market place using big data to connect retailers and merchants to consumers.
> 
> Think of Amazon, eBay, air bnb, uber and Facebook.
> 
> ...





Everything is possible. But all possibilities there need new cash.

Saw recommendation of $20 a share? So that's around $5.5B for the entire company?

I mean, if you're offered $5.5 billion for a loss making company that's still losing hand over fist and expanding that model into bigger, newer, foreign markets. Would you buy it?

As to using customer info, ads... How would that work and would it be enough to earn shareholders their $5.5B back?

Google and FB dominate the online ad space. General businesses won't go on AfterPay to advertise. If retailers and businesses were to place ads, how much would they be charged... and wouldn't that just mean AfterPay will have to lend cash to spend on them items? That's just more risk right?

It's nice to speculate. Just be aware that we're speculating. Collectively, billions are at risk. For a business where if successful to the investor will mean debt trap for people who could ill afford it. 

It's just the wrong kind of business to get involve in, on so many level.

But its share price should sky rocket come the presentation about new growthand market gains though.


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## leyy (27 January 2019)

luutzu said:


> Everything is possible. But all possibilities there need new cash.
> 
> Saw recommendation of $20 a share? So that's around $5.5B for the entire company?
> 
> ...




It all depend's on what the market values the business and what people are prepared to pay for it. It is very normal for companies to be loss making during hyper-growth phase and to be valued so highly.

It took Amazon 14 years to turn a profit.
It took Uber 9 years to turn a profit.
It took Airbnb 8 years to turn a profit.
It took Tesla 15 years to turn a profit.
It took Facebook 5 years to turn a profit.

The story goes on.... All these companies had crazy high valuations and some of these companies were losing billions of dollars annually.

How do you know business and retailers won't go on to AfterPay to advertise? Businesses and retailers probably thought the same thing with Facebook in mid 2000's. Why advertise on a social media platform?

Businesses and retailers thought the same thing when AfterPay when it was initially founded and now it has become a standard to have as a payment method.

The founders of AfterPay have a real long term strategy here and are creating a business model that will a) disrupt the banks/merchants/credit card companies with new payment methods b) create a new platform/marketplace where they are able to better connect merchants with consumers and brands and have more of a personalized approach with marketing and advertising based on your spending habits.

Wrong business to get involved in? Rubbish, we can all name hundreds of ASX 200 listed and Fortune 500 companies that do much more harm to the environment and communities we all live in.

Speculative? No, this is a real business with a business model that is disrupting the retail and payment services industries with a real life use case... Speculative stocks are more like early stage miners digging for resources.... There is no guarantee or real business model or like investing in cryptocurrency...  Yes there are risks involved with any investment and business and you have to DYOR and manage your risks.


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## luutzu (27 January 2019)

leyy said:


> It all depend's on what the market values the business and what people are prepared to pay for it. It is very normal for companies to be loss making during hyper-growth phase and to be valued so highly.
> 
> It took Amazon 14 years to turn a profit.
> It took Uber 9 years to turn a profit.
> ...




They're not disrupting the banks or credit provider. The banks have all been in this business decades ago. They left because there's no money in it.

AfterPay certainly disrupts the lay-by business. But beside the fancy app and no annual fees to join, its real disruption is immediate credit with nothing down. Sure, there's that 1/4th pay upfront on clients first loan or something... but that's basically advancing 3/4th to customers without much checking or any collateral. Risky.

If you look at APT's default rate, while its provision grew in proportion to its "underlying sales" figure, the actual write-off increased a couple times higher than the sales did.

The metrics its management is touting is really not the kind of metrics investors should be happy with. It's not hard to give cash strapped people money to buy stuff. Not hard to pretty much pay retailers and take on all credit risk for "4%" fee. I mean, 4% is nothing in retail... I could get that kind of bargain just by asking.


As to being similar to those FANGS... Big difference is that with every new client, APT actually fork out credit and hope that they didn't run away with it. 

FB etc., have their establishment costs, have their acquisition costs. So adding another million or two million users costs them practically nothing while their clicks, impression monetization grew in scale.

APT is not that model.

Having said that, given the economic difficulties, the high level of debt etc., AfterPay will definitely "grow" its retailing partner base, grow its customer base... and seeing how the market prices it according to those metrics, its share price will likely keep rocketing up and up.

Just that if we invest rather than speculate, if we look at the underlying business... is it sustainable? Or are they raising capital, borrowing more cash, grow their footprint... all to hide the actual business losses.

Isolating the expansion costs, the admin and general business expenses, APT's own default rate show the business itself is not scaling. That is, with more loans they suffer higher defaults. Defaulted at higher rate than their revenue growth as well as their "underlying sales" [the money velocity].

Here's where their model doesn't work: they lend more to those who [initially] pay on time. 

While that sounds sensible, it's not really. I mean, it's easier to repay a small amount than a bigger one. If a person intend to defraud the business, they'd first be nice and sweet and pay on time... then with the bigger amount of loan, they can take and run. More money to take, same hustle.


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## Knobby22 (27 January 2019)

I greatly respect your views on many companies but in this case I think that  your assumptions are incorrect on two counts luutza.

1. The assumption that the company will struggle to make a profit; even though it has just started and there are massive startup costs they are still making a profit if you exclude depreciation and amortizations expenses (as shown by the figures you published earlier). Getting 4% of each sale is massive and becomes more efficient the longer it goes and the larger the base as software does not cost more because you use it more. This company will spin off massive amounts of cash within two years. To me any other advertising etc. is just a side issue.

2. The assumption that people will successfully pay off a few items and that get so far into debt with Afterpay as they build credit that they can't pay or will deliberately defraud Afterpay. Firstly, with the defraud issue, most people don't think that long term. I am more worried about the initial customers, short termers after any cash.
Secondly, there is a certain pride to be given more credit and favoured status. People love that and hate to lose it, particularly as their friends use Afterpay also. I would not be surprised to see a reward scheme occur once they have finished the rollout in the UK.  That is not to say there is not the risk of fraud from professional shysters and it is important that Afterpay ensure they are dealing with real people at all times.
Thirdly, not paying will result in their credit rating being damaged, this is becoming more and more importsant in the modern world. Most people are smart enough to avoid it. Millennials are smart.


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## luutzu (27 January 2019)

Knobby22 said:


> I greatly respect your views on many companies but in this case I think that  your assumptions are incorrect on two counts luutza.
> 
> 1. The assumption that the company will struggle to make a profit; even though it has just started and there are massive startup costs they are still making a profit if you exclude depreciation and amortizations expenses (as shown by the figures you published earlier). Getting 4% of each sale is massive and becomes more efficient the longer it goes and the larger the base as software does not cost more because you use it more. This company will spin off massive amounts of cash within two years. To me any other advertising etc. is just a side issue.
> 
> ...





If you look at their debt written off/collected... well, from other places, it's not really "collected", mostly written off.

That ratio grown 6.97x versus its receivables of 2.45x, underlying sales of 3.89x.

That shows that default rate is a lot higher as the business scales, not lower or remain constant.

Further, debt written off at $22.759 is about 9% to receivables. This compare to 3.15% in FY17.

The scaling is not reducing the default rate, it multiplies it.

So even if we isolate, ignore, the start up costs as I think I did above, the business model itself does not work.

Someone else pointed out that APT loses a similar amount of money while its sales and revenue grew by a lot from FY17 to FY18... so that could be seen as it's losing less while growing strongly.

But remember that APT raises some $140M in new equity soon after FY18 book closes. They also borrow too right?

You could then look at it as spending new cash from shareholders and bankers, and losing the same amount of cash. Might as well do nothing and lose the same amount.

Its business model is not sound. 

And its claims about perfering members who can pay on time, not be late and charged a fee.... that's total Bull.

I mean, sure management can have some creative license in their presentation... but that's just outright lying to investors. Not to mention the "1.5%" default claim they keep on making.

While technically true that they've made provision for that 1.5% default on the entire amount they loaned out... their business model mean that that total amount that is their actual Revenue is not $2.2B but rather some $142M. 

So the $32M provision, and the actual $22M in default... compare that to the total revenue is not 1.5%. That's just a class action waiting to happen.

As to the membership preference... if all members were to pay ontime, no late fees. How in the world will APT make their money?

They'd have to either lower the interest expense their lenders are charging, and also demand a higher discount from their retailers.

I mean, if interest expense is some 3.6% while retailer discount is 4% average... who's going to pay for the operating costs, the marketing, the IT guys, the accountants...?

So they're very dishonest. 

But yea, I'm just saying what I thought of it. Maybe I'm way off the mark but yea. So far I don't really buy the whole concept of AfterPay as a business.


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## Knobby22 (27 January 2019)

I think we will just have to disagree and see how it pans out. The more people pay on time the more they make. Chasing money is not profitable.The next set of results will be interesting. My expectation is that the Australian bu siness should be  very close to profitable while the US business will make a loss due to the starting costs.

The reason for the raising was primarily cash flow and buying the UK business.
Negative cash flow normally occurs in startups till the expansion slows.


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## luutzu (27 January 2019)

Knobby22 said:


> I think we will just have to disagree and see how it pans out. The more people pay on time the more they make. Chasing money is not profitable.The next set of results will be interesting. My expectation is that the Australian bu siness should be  very close to profitable while the US business will make a loss due to the starting costs.
> 
> The reason for the raising was primarily cash flow and buying the UK business.
> Negative cash flow normally occurs in startups till the expansion slows.




Not that I need to ask, but please don't listen to me. I just raise certain issues I have with the company and its business.

Best use of what I said is to take a look and see if it makes sense of course.


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## luutzu (27 January 2019)

Knobby22 said:


> No worries. One other thing. The 1.5% is how many don't pay, not revenue. So no class action there.




They got that 1.5% by taking a 1.5% provision [estimate? shouldn't it be the actual?]... anyway, they took that provision of some $32M for default, divide it over the $2.2B in "underlying sales" to give the 1.5% "default rate".

When I first read that, I thought that's not too bad. Default at 1.5% is alright.

But on closer look at the actual revenue APT receive from all that "underlying sales"... its revenue is about $142M for FY18.

Using the same $32M provision for default, it's about 22.5% default.

Using the actual reported default/written down bad debt of $22.7M on the same $142 revenue... that's 16% default.

Maybe it's just me, but I find it misleading to say default is only 1.5%, the lowest among those other credit provider etc.... when it fact, when compared to the actual revenue the company is expected to receive, default is from 16 to 22%.

So maybe their 1.5% default is technically correct once you read the fine print... it's quite deceptive.

I mean, if you run a business and 16 to 22% of your your expected revenue is highly unlikely to ever hit your bank account... that's not 1.5% default, no worries kinda talk.


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## Knobby22 (27 January 2019)

luutzu said:


> They got that 1.5% by taking a 1.5% provision [estimate? shouldn't it be the actual?]... anyway, they took that provision of some $32M for default, divide it over the $2.2B in "underlying sales" to give the 1.5% "default rate".
> 
> When I first read that, I thought that's not too bad. Default at 1.5% is alright.
> 
> ...



I deleted my comment previously because I thought I misinterpreted your comment and you were referring to something else.

They are pretty clear about this. 1.5% default rate, they are aiming long term for 0.5% default rate. As they limit the initial purchase to a low figure and also get initial  payment of 1/4, the losses are limited but obviously it takes a lot of sales at 4% to make up for one 75% loss.

Banks are the same. A few bad loans greatly effect profits however they are lending far larger amounts at less margin.

A rate is not a revenue. The revenue loss is far greater than 1.5% as explained. As the default rate drops (as is happening) profits increase.


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## luutzu (27 January 2019)

Knobby22 said:


> I deleted my comment previously because I thought I misinterpreted your comment and you were referring to something else.
> 
> They are pretty clear about this. 1.5% default rate, they are aiming long term for 0.5% default rate. As they limit the initial purchase to a low figure and also get initial  payment of 1/4, the losses are limited but obviously it takes a lot of sales at 4% to make up for one 75% loss.
> 
> ...




So the default provision they quoted... is that just a provision or the actual default where they wrote off the debt?

I used the figured they quoted and it looks like it's just a 1.5% provision on the total "underlying sales". 1.4% to 1.49% for the two years from memory.

Issue I have is that if they're simply putting the fixed provision aside, why are they quoting it as if it's the actual default?

Defaults, judging by the Fy17 and FY18 results, weren't really dropping. They grew at a higher rate than the revenue or the "sales" grew. 

BUt it could just be me not getting this lending business.

I'm looking at Monadelphous and their growth/expansion approach is very different.


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## So_Cynical (27 January 2019)

leyy said:


> It took Amazon 14 years to turn a profit.
> It took Uber 9 years to turn a profit.
> It took Airbnb 8 years to turn a profit.
> It took Tesla 15 years to turn a profit.
> It took Facebook 5 years to turn a profit.




Its all true, at the start nothing is actually making money.


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## galumay (28 January 2019)

leyy said:


> It all depend's on what the market values the business and what people are prepared to pay for it. It is very normal for companies to be loss making during hyper-growth phase and to be valued so highly.
> 
> It took Amazon 14 years to turn a profit.
> It took Uber 9 years to turn a profit.
> ...




While that is true for those few companies, and even amongst those 6 you could easily pick a number of them that will likely not turn out to be profitable in the long term, there are simply thousands of businesses which had similar narratives and not only never made a profit, but completely disappeared.

It pays to remember the effect of survivorship bias when you are looking at high growth tech businesses. Most of them end up failing. 

I dont care because I have no interest in APT as a business, I dont see it as being investible. I am interested in the narratives people create to support their emotional attachments to certain businesses and I use that to try to learn more about myself. 

I wouldn't totally dismiss the ethical arguments against APT, you might not share the view, but regulators will continue to watch closely and there will be many investors who avoid for ethical reasons.

I also think its naive to dismiss the view that its a speculative business at this stage, until its consistently cash flow positive and its earnings are a consistent and worthwhile return on invested capital I think it will be considered by many to be speculative. At this stage of its development the intrinsic value would be multiples less than the current share price, which sort of confirms that the current price is purely speculative based on unknown, future returns that buyers hope will be much, much higher than currently. 

All of the planets may well line up and buyers at today's price may see great returns on their capital, I certainly hope so for your sake and the other holders here. I would simply encourage you not to dismiss out of hand the concerns other investors have about the business.


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## Knobby22 (28 January 2019)

I find the ethical argument strange.
Users avoid the credit card traps and payday loans companies. No one should be buying the banks as their behavior in respect to credit cards (ignoring all the other things) has been very poor e.g. 24% interest rates.

It amuses me the banks are sponsoring groups to attack Afterpay and directly requesting the Morrison Government to destroy the Afterpay model as it is hurting their profits. 

I first got involved when my nieces started using it. They don't have credit cards as they don't want debt traps.

Afterpay is a credit card disruptor. It is a way of buying clothes, dentist etc. without paying interest with an agreed payment plan. What is wrong with that?
It is effectively back to the days of layby except automated and as millenials expect, get the goods/service now.


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## luutzu (28 January 2019)

Knobby22 said:


> I find the ethical argument strange.
> Users avoid the credit card traps and payday loans companies. No one should be buying the banks as their behavior in respect to credit cards (ignoring all the other things) has been very poor e.g. 24% interest rates.
> 
> It amuses me they are sponsoring groups to attack Afterpay and directly requesting the Morrison Government to destroy the Afterpay model.
> ...




AfterPay actually charges 25% on their targeted members. Plus that average of 4% on retailers.

That's pretty damn outrageous.

I know they say it's $68 or 25%, whichever is less... But that's per item right? Each item they could theoretically go up to where it's around 25% penalty.

Credit cards give you 55 days no interest right? AfterPay give its members 2 weeks instalment... so that's 56 days in total but with the fortnightly repayment, they require payback earlier than the traditional credit providers.

So if members all pay ontime, APT won't make money. They'd be lucky to break even. So their model relies on members forgetting or not having cash on time to repay.

For investors, that's the good news.

The bad news is that once members can't pay on time; won't be able to pay the late fees either. APT can't charge compounding interests and will have to chase up the debt. That costs money but for not much further benefit beside those additional fees the debt collector charges.


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## galumay (29 January 2019)

Knobby22 said:


> Afterpay is a credit card disruptor. It is a way of buying clothes, dentist etc. without paying interest with an agreed payment plan. What is wrong with that?




I dont really see it as a credit card disrupter, given the very small amounts a user can have outstanding with APT. Also a % of users will be ending up putting the APT debt on their credit cards anyway. 

Whats wrong with it from an ethical point of view will differ with an individuals ethics! Hence you see no issue. For me one of the ethical issues is that the end result is likely we all pay more so that some can access short term debt. That is a consequence of the model that makes its profit mainly from the retailer rather than the consumer. 

Also I wasnt saying it should be an issue for everyone, just that its an issue that any investor should consider and not just dismiss out of hand.

What I tend to see with highly hyped businesses is that every potential negative raised about the business is quickly dismissed out of hand, and then reinforced to coat with a layer of confirmation bias.


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## Knobby22 (29 January 2019)

I think the Chairman explains it better. Underlining is mine.


I think it’s important to explain this element of our competitive advantage in more detail as it really is
fundamental to our story. Under our business model:

▪     Afterpay’s revenue is based on merchant fees, not on customer debt

▪     We do not make our profit from customers and users

▪     We make more money when customers buy what they can afford, pay on time and stick to their simple instalment plan

▪     When our customers get into trouble, we lose money

This means that for Afterpay, things like responsible spending are more than words. They are fundamental to the success of our business. And this means that we could not be more different to traditional credit products. It’s this difference that has helped us to build trust with our customers, and trust with our retail partners.

And we back this up with our actions.

If we get it wrong, and a customer misses a payment, they cannot use Afterpay again until they settle their account with us. Could you honestly imagine a traditional credit company stopping you from buying anything else or going deeper into debt because you missed a single payment and didn’t pay off discrete items in full?

These are unbreakable rules of our model, our community and our business. These unbreakable rules prioritise customer payment responsibility.

And everything we do incentivises our community to adhere to these rules:

▪     Afterpay is a free service for customers who pay on time

▪     Customers must pay purchases off in full in a short time period – its about budgeting and buying to “own” and not “rent” – you can’t “_kick the can down the road_” with Afterpay by way of paying us a fee or otherwise

▪     Afterpay is for discrete purchases – not a line of credit

▪     Customers are suspended if a single payment is late – that means bad debt cannot accrue or revolve - and we intervene as early as possible in the debt cycle to stop people getting deeper into trouble

▪     Similarly, late fees – if charged, are minimal, capped and don’t accumulate

▪     And, strict spending caps that start low for first time customers and increase only with demonstrated positive behaviour - and even then the maximum individual purchase limit is capped at $1,500

We know that these rules and incentives work because the data reinforces this point:

▪     Overall Afterpay rejects around 30 percent of the purchase requests we receive.

▪     Approximately 95% of payments received in FY18 did not attract a late fee

▪     Over 90% of monthly transaction volume comes from returning Afterpay customers, which is only possible if these customers use the system responsibly and their payments are up to date.

▪     And over 85% of our customers prefer to pay with debit cards rather than credit cards


Furthermore, our average transaction values and balances outstanding are low:

▪     Our average balance outstanding is just over $121, compared to average Australian credit card debt of over $4,000

▪     Of those customers that have positive balances outstanding >90% of them are less than $500; And

>75% are less than $350

Despite our business growing exponentially, Afterpay’s default rate has declined and remains very low

on any comparative basis


FY18 Gross Loss = 1.5%

-     44% lower than the other buy now pay later1

-     90% lower than payday lending2

-     79% lower than other consumer leasing finance providers3


Why are we so different?

Because we employ a model that relies on merchant fees to generate profit rather than charging the customer

Reflecting these metrics, but going beyond them, I am particularly pleased to report that today

Afterpay is the most trusted digital payment platform in Australia

This is especially important because all of our competitive advantage - what makes us truly unique and valuable - is most fundamentally about trust.

On the key topic of TRUST, it is interesting to note that in July 2018 Roy Morgan surveyed 1,200

Australians and found that:

▪     Of all the 18 sectors tested, Banks had the lowest Net Trust Score of all

▪     And by significantly more than double the next least trusted sector – which, incidentally, was

Telcos


▪     In trend terms each of the four pillar banks have come off peak customer satisfaction ratings

pre-2015, to where they are today


While this has been going on, the finance sector has seen the arrival and growth of –

new entrants, new competitors, new models and new concepts in finance.


A new generation of customers are trusting a new generation of financial services.


And at the top of this is Afterpay. Afterpay’s Net trust Score according to Roy Morgan was +61

compared to the Banks at -14.


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## tinhat (29 January 2019)

Knobby22 said:


> Afterpay’s revenue is based on merchant fees, not on customer debt




Afterpay don't charge interest on the money they lend out. I can assure you that the lenders which the stated business plan is relying upon do. Afterpay's revenue model relies upon earning merchant fees. I think these facts have been well established and discussed here now.

Much of the discussion here has been about factoring for bad debts and the sensitivities of the model to fundamental items in the accounts; debt, revenue, bad debt expense, interest.

The Roy Morgan trust score for banks might be bleak. Who is in love with their bank or their landlord? I doubt that a low market research score is going to be the reason for anyone defaulting on their mortgage just as much a I doubt that Scott Morrison's approval rating as PM is going to dictate the GDP figures. I would also bet that Coca Cola probably scored higher as a brand a few decades ago than it does now, but is the product any different?

If we could just believe everything that is in the company reports (or the economist and analyst forecasts) there would not be any need for this discussion or these fora.


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## bigdog (30 January 2019)

Half yearly report due Feb 21 Thursday and should be VG news expected

Over the last 12 months the All Ordinaries index is down approximately 3.1%.

Fortunately, not all shares on the index have performed as poorly over the period. In fact, some have not only pushed higher during this time, but more than doubled in value.

The *Afterpay Touch Group Ltd* (ASX: APT) share price has rocketed 110% over the last 12 months. Investors have been fighting to get hold of the payments company’s shares after its strong start to life in the US market demonstrated the significant potential of the Afterpay platform globally. Afterpay Touch recently advised that its US business processed $260 million of underlying sales in the first half of FY 2019, with annualised underlying sales now in excess of $500 million. In the ANZ market approximately $2 billion in total underlying sales were processed through the platform during the half, more than double the prior corresponding period.


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## bigdog (2 February 2019)

*Westpac Bank is trying to compete with Afterpay!!!!

YOU MUST HAVE A CREDIT CARD!*

I have a Westpac Credit Card and on Wednesday last week I spent just over $500 charged to my card.

On Friday, I received email from Westpac offering my to used new "Large Purchase SmartPlan" with terms of 3, 6 or 12 months, our 0% p.a. Large Purchase SmartPlan may make paying off big ticket items or a large, unexpected expense, a little easier.










https://www.westpac.com.au/personal-banking/credit-cards/smartplan/?searchsource=search-results&kw=smartplan&cat=services,-support-&-faqs&rank=1&result-type=natural











Using link above you review of *Frequently asked questions*

Listed two of questions answered as follows













4694


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## Knobby22 (2 February 2019)

It's pretty much what SPT SplitIt is offering which is what I thought would happen as it is really just an app. I can't see it doing much to Afterpay. The, advantage of Afterpay is you avoid the need of a credit card and it's traps.

Thanks for the heads up.


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## Sdajii (4 February 2019)

The chart is looking very nice for a breakout! Looks to me like it will shortly retest $18 and if it can beat that, $20+


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## Sdajii (8 February 2019)

Well, we did indeed break out, we did indeed retest $18, but after failing that, I sold out and took my profit. Good thing I did as the next day (today/Friday) we dropped further. I sort of considered buying back in today under $17 but it seems we're in a precarious position and it may now be equally likely that we'll fill the gap to around $14.45 as breaking $18. Will definitely buy back in if we fill the gap down to $14.45. Seems entirely likely now that we'll spend some time between $16 and $18 without anything interesting happening for a while.


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## bigdog (13 February 2019)

https://www.livewiremarkets.com/wires/afterpay-early-traction-in-the-usa

*Afterpay: Early traction in the USA*
Michael Frazis
Frazis Capital Partners


We’ve been tracking Afterpay’s US roll-out by following inbound traffic on sites like SimilarWeb, which helped us ride out the recent volatility. SimilarWeb showed months ago that Urban Outfitters, a US store, was the number one source of inbound traffic, ahead of any Australian website. This was quite an achievement, given the firm had only been operating there for a few months, and an important indicator of early momentum.

10% of online retail in Australia is now processed by Afterpay, and the opportunity in the US and UK is orders of magnitude greater. If the firm achieves similar success in the US, Afterpay could be valued in line with payments peers like Stripe (~$20 billion) or even PayPal (~$105 billion).

The real surprise for us was Afterpay’s success in-store, which now accounts for over 15% of sales.









_Afterpay posted a strong increase in US inbound traffic in December 2018._

In our opinion, Afterpay is the single best way to buy something on the internet. The value proposition for the customer is clear: free credit, and a seamless username and password purchasing experience. This is far easier than typing in credit card details and a lot less cumbersome than Paypal. The value proposition for merchants is also straightforward: an immediate and easily measured increase in sales.

Regulation is a risk, but as the Australian real estate market reels in the aftermath of considerable political attention, policy makers are hopefully sensitive to the unwelcome side effects of restricting lending. Putting burdensome regulation on one of the few drivers of retail demand would not be wise, in our opinion, nor welcome.

Afterpay’s approach to credit risk is far more democratic than arbitrary tests of income and spending. The firm allows most to borrow small amounts, then quickly cuts off those who default, while allowing larger purchases to those who prove reliable. This is precisely how lending should work. And every month of progress in the United States reduces the impact of an Australian regulatory setback.

Everyone seems to want to invest in data these days and Afterpay’s is particularly valuable: they know which of their 3.1 million customers will repay a small, short term loan, and which will not. With every passing week, Afterpay weeds out more defaulting customers, leaving them with an increasingly responsible and profitable user base.

Afterpay has a surprisingly good lending business: the loans are small (~$150), short term, quickly amortised, free for consumers and can’t compound into significant amounts. These are characteristics of good credit risk, in stark contrast to credit cards and personal loans, which are expensive, enforced, and for those unable to keep up with payments, can quickly accrue into ruinous long-term liabilities.

In return for taking fairly benign credit risk, Afterpay earns ~4% from merchants. This doesn’t sound like much, but annualises to a far higher rate than personal loans or credit risks, all for a superior risk profile.

The firm has clearly hit a resonant chord amongst consumers. Competitors lack Afterpay’s simplicity, and mostly give consumers a traditional line of credit couched in the language of fintech. Zip, frequently cited as a competitor, offers a wallet with a spending limit. Affirm in the US offers comparatively high value loans with interest. Klarna similarly, offers loans and charges interest. None of Afterpay’s competitors have shown the discipline of Afterpay’s management to focus on one, easily described (in a single word!) credit product.

Contrary to the commentary of some local value investors, it’s very possible to form an analytical valuation of the stock. By forecasting their future customer base, average transaction value and transaction frequency per year, it’s possible to model revenue under different scenarios. By applying their net transaction margin (which can be flexed by financing costs, operating costs, defaults etc) you can come up with a profit figure and form a valuation. As you might expect, much depends on their growth runway in the United States, which is why we consider their early momentum and traction so relevant.

It’s often hard to say why one product succeeds while a similar one fails, but in this case it’s clear that Afterpay has that magic pixie dust that makes it popular with consumers and indispensable to merchants. Perhaps it’s the simplicity and discipline of the product, the zero interest model, or even just the name, but there’s growing evidence from the US that shows this not a solely Australian phenomenon. If so, the firm’s best years are still ahead of it.


*One month SP Chart:*
Low $12.86
High $18.00
40% increase in month






I own Afterpay shares and is my tip for February ASF comp

187


----------



## leyy (13 February 2019)

Great post bigdog. I am in my mid 30's, have no issues with money and generally purchase online retail on my credit card for the reward points and the free interest period (I always pay off the balance).

Your post hit the nail on the head, the more I use afterpay the more I prefer it over a credit card as a method of payment. It is so user friendly, good user experience, simple and fast. I also get the added bonus of linking my visa credit card on it so I get a longer interest free period with the split payments of afterpay and 55 days from my credit card plus I still get reward points with my credit card.

There is so much potential for afterpay on verticals market for payment. Besides retail, think of paying your utilities, water/council rates, strata, insurances, telco's.

Hospitality, Airlines, Accommodation and Restaurants.

The list goes on & on, anything that can be transacted online or instore with a credit card, paypal or other payment method has got some real competition.

Trying to find another dip/retracement for a sizeable top up before the next leg up.


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## bigdog (18 February 2019)

*
APT Interim half yearly report will be issued Thusday February 21 2019 

Approaching at time high at $23.00

Share price has been increasing $12.08 at Jan 4 to $18.88 currently (+56%)*











*Motley Fool reports*
https://www.fool.com.au/2019/02/18/why-2019-is-shaping-up-to-be-the-year-of-afterpay/

*Why 2019 is shaping up to be the year of Afterpay*
Nikhil Gangaram | February 18, 2019

Much like its customers, investors have fallen in love with buy now, pay later platform *Afterpay Touch Group Ltd* (ASX: APT), with the APT share price rocketing over 150% in the past 12 months.

Here’s why I think the best is yet to come for Afterpay and why 2019 could be a launching pad for its future.

At the start of this year, Afterpay released a business update announcing that sales for the first half of FY19 were $2.2 billion, up 140% in comparison to last year’s result of $916 million. The platform which has been lovingly adopted by millennials processed around $2 billion in Australia, with a further $260 million coming from the USA.

*International expansion continues*
A report released by ASIC in December 2018 showed a 400% increase in new Australian customers who had adopted services like Afterpay during the year. This is exciting and bodes well for the company as they look to further expand into the USA and UK, both of which boast millennial consumer markets that dwarf that of Australia. Analysts from Goldman Sachs believe that the US market for Afterpay is about 15 times larger than the market in Australia.

Currently, in the USA, Afterpay is used by over 650,000 customers and has signed agreements with over 3,600 retailers. Notable names include the likes of Urban Outfitters, Forever 21, Boohoo and Kim Kardashians beauty brand KKW Beauty. According to the company, this growth rate is far greater than what was experienced in Australia after a similar period. Afterpay is still in talks with two investment banks with the potential of funding over $4 billion in annual sales.

The UK expansion of Afterpay is still in its infancy, with initial feedback from retailers being positive. According to analysts, the UK boasts the worlds third largest e-commerce market with favourable dynamics when it comes to millennial consumers. In 2018 Afterpay acquired local buy now, pay later business ClearPay Finance Limited. This acquisition is a sensible strategy given the different regulatory dynamics of the UK.

*How the “Buy now, pay later” Senate inquiry could impact Afterpay*
In 2019, the first speedbump for Afterpay will be the Senate inquiry into the regulation of the buy now, pay later sector. The review, which ends on the 22 February, is looking at whether businesses like Afterpay and *Zip Co Ltd* (ASX: Z1P) should fall under national consumer credit protections.

In my opinion, the outcome of the report should not do any harm to the company whatever the result. The worst-case scenario would be that companies like Afterpay would be required to conduct credit checks on individuals. I believe that such a ruling would have minimal negative ramifications on the business given its unique model which focuses more on making money from merchants rather than the consumers.

In my view, the ability of Afterpay to empower users and wean them off relying on credit cards is a great boon and should see the movement grow in the future along with the company and the Afterpay share price.


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## bigdog (20 February 2019)

*SP down today before half yearly report will be issued Thursday February 21 2019 *

any info/suggestions on why the drop?






Suggestion from activity below was robot war with 109 share trades


----------



## Knobby22 (20 February 2019)

Up nearly every day for a month, pullback has to occur, short termers will want their profits.
Probably drop again tomorrow.


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## Smurf1976 (20 February 2019)

bigdog said:


> *SP down today before half yearly report will be issued Thursday February 21 2019 *
> 
> any info/suggestions on why the drop?




Today's high 19.19 and thus far the low has been 16.90 so a pretty decent fall in % terms for stock of this price. Dropped by about $1.40 in 4 minutes at one point so that's pretty steep. 

Someone knows something regarding tomorrow's report and is selling out?


----------



## bigdog (20 February 2019)

Volume currently 2,991,782 for 19722 (average 151 shares per trade) and total shares is higher than any day for February






Daily Volume back to Feb1





Charting for SP for today


----------



## peter2 (20 February 2019)

Definitely some profit taking today before the report tomorrow. Although I think some of the profit takers panicked a bit this afternoon. They probably think someone knows something about the details of tomorrows report.


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## Wyatt (20 February 2019)

Nervous Nellies did something similar in A2M yesterday, gave some a chance to buy a bargain it seems.


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## luutzu (20 February 2019)

Wyatt said:


> Nervous Nellies did something similar in A2M yesterday, gave some a chance to buy a bargain it seems.




AfterPay the business will show massive losses tomorrow, I guarantee you.

Its business model is not working. Won't work.

If given enough cash and enough brain at its board, it might make critical changes to the current model and may survive. But chances of that happening in time is zero.

Currently, the late fees does not cover the costs to recover debt, the write downs, and a conservative estimate of recoverable doubtful debt.

In fact, the net expense in delay/default of repayment is actually higher than its interest expense in FY18. That's messed up.

With that new $117M equity, and I'm guessing a couple hundred more millions in new debt... expanding into the US... defaults and writedowns will be huge.

But I'm sure its share price will rocket up soon enough.

But if I were to short... I'd wait for the coming property crash, quickly followed by a great recession and credit crunch with job losses... Watch the default rate then.


----------



## leyy (20 February 2019)

IMO there is a very high probability APT will report some crackers results tomorrow, with some record growth numbers in US, update on UK expansion and overall transactions.

Let's see who is right luutzu


----------



## luutzu (20 February 2019)

leyy said:


> IMO there is a very high probability APT will report some crackers results tomorrow, with some record growth numbers in US and overall transactions.
> 
> Let's see who is right luutzu




I'm sure its "underlying sales", the take up, the membership, the retail partners... those numbers will be very, very high.

Seeing how the market seem to judge APT's performance through such metrics... share price might very well rocket up again.

I'm talking about its viability and the coming credit crunch.


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## leyy (20 February 2019)

Why do we think APT is reporting tomorrow? according to it's last announcement they will report on 26 February


----------



## luutzu (20 February 2019)

leyy said:


> Why do we think APT is reporting tomorrow? according to it's last announcement they will report on 26 February


----------



## bigdog (20 February 2019)

Downloaded all the trades and the top 14 were not substantial trades (sorted highest to lowest)

There were no significant trades today!!
-- the biggest trade was 21,304 shares for $380,276.40






Total trades were 3,912,120 for 28017 transactions and average trade was 139 shares

Perhaps the robots were busy today!!!


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## peter2 (20 February 2019)

Looks like a few reporting calendars have the wrong date for APT's next fin report. 
After market close APT reaffirms Feb 26th as the date for release of H1 report. 

"The Company notes that the Senate Committee’s report in respect of the Senate Inquiry into Credit
and Financial Services Targeted at Australians at Risk of Financial Hardship is due to be published this
Friday 22 February 2019."


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## bigdog (21 February 2019)

Peter2 you are right









*Below is article included todays "The Age"*
https://www.theage.com.au/national/...the-other-wild-west-20190220-p50z2i.html?btis

*Sometimes a head's up doesn't pay*
Hats off to the geniuses at Afterpay, the "buy now, pay later" outfit eagerly awaiting the outcome of a senate inquiry into its business model, due Friday.

Just after 11am Wednesday, the *Nicholas Molnar*-led company suffered a sharp sell-off in shares, dropping from $19.10 to $17.30 just 40 minutes later.

Much of that, double the number of trades on an average day, went through Citi and UBS.

Now it appears Afterpay dialled around analysts – the company is tracked by Goldman Sachs, Bell Potter, Morgans, Wilson and Evans & Partners –  to remind them of the inquiry's report due to be handed down by Labor’s *Jenny McAllister.*

Not exactly a sign of confidence in Afterpay’s "economics advisor" *Craig Emerson* or its Liberal-aligned lobbyist *David Gazard*, who have led the effort in advising the company as it faces the prospect that the inquiry will recommend tough measures that could seriously harm its business.


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## bigdog (21 February 2019)

Opened at $17.45

6011 trades with average 235 shares


----------



## bigdog (22 February 2019)

*Who leaked the report!!*

I hold

Parliament is investigating whether MPs and their staff are in "contempt of the Senate" after shares in buy-now pay-later companies including Afterpay plunged following the internal circulation of a draft report. 

The draft findings of an inquiry into the sector, which could recommend tougher credit regulations on the booming industry, were shared among six committee members at 7.30pm on Tuesday.

As many as 58 staff in senators' offices could also have accessed the report, which is due to be released on Friday.

The Age
https://www.theage.com.au/politics/...ers-senate-investigation-20190221-p50zbu.html

*$1.3 million Afterpay share dive triggers Senate investigation*
*By Eryk Bagshaw and Colin Kruger*
February 21, 2019 — 6.38pm

Parliament is investigating whether MPs and their staff are in "contempt of the Senate" after shares in buy-now pay-later companies including Afterpay plunged following the internal circulation of a draft report. 

The draft findings of an inquiry into the sector, which could recommend tougher credit regulations on the booming industry, were shared among six committee members at 7.30pm on Tuesday.

As many as 58 staff in senators' offices could also have accessed the report, which is due to be released on Friday.

Shares in the providers fell an hour after the market opened on Wednesday, with Afterpay falling by 11 per cent between 11.16am and 11.37am.

Trades of more than 1000 shares were made with a value of more than $1.3 million. By the market's close, more than 3.9 million shares were traded, double the daily average.

Buy-now, pay-later companies have surged as an alternative to conventional credit products and are available at thousands of stores across Australia, including David Jones, Asos and Nike

Afterpay, which is expanding to the United States and United Kingdom, has a market capitalisation of $4 billion. Its share price has surged by 58 per cent since the start of this year.

The Australian Securities and Investments Commission said it started inquiries into the sharp share price drops of Afterpay and its rivals Zip and FlexiGroup on Wednesday night.

"There was no general announcements that proceeded this drop," ASIC commissioner Cathie Armour said.

The Senate secretariat is now expected to summon senators, staff emails and interview those close to the report to establish if there had been contempt. That process was still being determined on Thursday afternoon.

One committee member said they expected the Senate to get the investigation "finished ASAP" as regulators turn their attention to traders who may have scored out of the plunge. It was revealed on Wednesday that Afterpay, which is tracked by Goldman Sachs, Bell Potter and Morgans, dialled around analysts to remind them of the inquiry.

Committee chair Jane Hume and fellow Liberal member Amanda Stoker have ruled out any disclosure coming from their offices, as has Greens Senator Peter Whish-Wilson, who was substituted for Sarah Hanson-Young for the hearings of the Senate inquiry. Senator Hanson-Young ruled out any distribution of the market sensitive document from her or her staff.

Labor Senator Chris Ketter could not rule out an unauthorised disclosure coming from his office.

"It’s not clear what happened in this circumstance, but the Senate has well-established procedures for considering potential instances of unauthorised disclosure," Senator Ketter, the committee's deputy chair, said.

"Labor senators take the confidentiality of committee deliberations seriously."

Fellow Labor senators Kristina Keneally and Jenny McAllister have not responded to requests for comment.

Speaking at Zip's half-year results on Thursday, chief executive Larry Diamond was asked what the he thought the report recommendations would find.

Mr Diamond said after the bank royal commission “it would seem unusual that unregulated pockets would continue to exist” in the financial sector.

Zip executives said the company was “well placed” regardless of the report's outcome because it conducts credit checks on its customers.

A coalition of consumer groups including Choice, the Consumer Action Law Centre and the Financial Rights Legal Centre have all urged regulators to bring buy-now, pay-later providers under the National Credit Protection Act.

Afterpay has voluntarily instituted some of the act's requirements, including hardship and external dispute-resolution schemes, but it is resisting full banking regulation which would compel all companies to conduct formal credit and affordability checks at shop counters.


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## bigdog (23 February 2019)

Todays Fin review

*Afterpay dodges tough regulation from Senate*
By *Misa Han*
Updated Feb 22, 2019 

Afterpay and its buy now, pay later rivals have dodged a requirement to conduct costly credit checks before they can sign up customers but may have to do more to ensure their users can afford to repay their debts.

The final report from a Senate committee released on Friday afternoon recommended the government consider in consultation with the corporate regulator, consumers and industry ‘‘what regulatory framework would be appropriate for the buy now, pay later sector’’.

It said the regulation framework should require buy now, pay later providers to ‘‘appropriately consider consumers’ personal financial situations’’ before credit is extended.

However, the committee stopped short of recommending Afterpay and its competitors to be covered by the National Credit Act, which would have required them to conduct responsible lending checks on consumers.

Consumer advocacy groups have argued that Afterpay should be treated as a lender and should be subject to responsible lending laws, which Afterpay has rejected.

It is expensive to run credit checks on consumers and it would have squeezed the profit margin of Afterpay because the average purchase made by its users is $150.

‘‘Unlike other credit providers, these products are not covered by the National Consumer Credit Protection Act 2009 ... and providers have no obligation to undertake credit checks or appropriate measures to ensure their product is appropriate for the consumer’s personal circumstances,’’ the committee said.

‘‘The committee considers that this regulatory gap should be filled.’’

The committee said there is a real risk for vulnerable Australians from adding buy now, pay later products to a mix of other credit products.

‘‘The evidence by buy now, pay later providers ZipCo and Afterpay to this committee suggested that both were alive to these risks and willing to strengthen the regulatory framework that applies to the sector.

‘‘There is no guarantee, however, that future entrants to the sector will take a similar approach.

‘‘There is a clear role for regulators in ensuring that buy now, pay later is subject to proper regulation that will provide consumers with the same protections they would enjoy with respect to products with a similar risk profile.’’

This recommendation goes further than the corporate regulator, which said Afterpay and its rivals should be subject to its product intervention power but they should not be subject to further regulation at this stage.

The committee said the regulation should also ensure consumers have access to internal and external dispute resolution mechanisms.

The committee also recommended extending the corporate regulator’s product intervention power to cover buy now, pay later providers.

In addition, the committee recommended Afterpay and its competitors develop an industry code of practice.

As part of an inquiry into credit providers targeting vulnerable consumers, the Labor-led Senate committee looked into the buy now, pay later sector as well as payday lenders and debt management companies.

In recent years buy now, pay later services have become more popular particularly among Millennials who choose to use the service over traditional credit cards.

Zip reported this week it had more than doubled its revenue to $34.2 million in the six months to December. Afterpay and FlexiGroup are due to release their half-year results on Tuesday.

On Wednesday, before the final report was officially released but after the draft report was circulated among Senators, the share price of Afterpay, Zip and FlexiGroup dropped sharply. The corporate regulator is now looking into the unusual trading in Afterpay and its rivals.


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## bigdog (25 February 2019)

*Afterpay dodges tough regulation from Senate*


----------



## aussymatt (25 February 2019)

bigdog said:


> *Afterpay dodges tough regulation from Senate*
> 
> View attachment 92462



Looking good . I got in on this pretty early on ($9.05) God love the people who want stuff now


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## Ann (25 February 2019)

*Afterpay soars after Senate report clears regulatory clouds*

_The Senate report into the buy-now-pay later (BNPL) sector may not have cleared all regulatory hurdles but it was enough to send Afterpay's share price soaring Monday morning.

Afterpay shares were up more than 18 per cent at noon to $22.27, and rivals Zip Co and Splitit were up 8 per cent and 12 per cent respectively, in response to the release of the report Friday evening which confirmed the sector would not be brought under the onerous provisions of the Credit Act. More...._


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## peter2 (25 February 2019)

With all the hype and huge trading volumes over the last three days I don't know what to expect after the report is released tomorrow. Price could hit either $25 or $15.


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## leyy (25 February 2019)

peter2 said:


> With all the hype and huge trading volumes over the last three days I don't know what to expect after the report is released tomorrow. Price could hit either $25 or $15.




Today's reversal was expected as a result of a much better than expected final report from a senate committee.

My view is that there is a very high probability Afterpay will report some impressive growth numbers in the US and a good update on UK expansion. Will it be enough to excite the market? Only time will tell.

It will BO from previous high of $22.50 in August 2018, maybe around $28-$30 with the current volume, hype and FOMO.


If it is the latter (a bad report) I suspect $15 is where it could get punished too.

For the brave, be ready to brace for impact.


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## bigdog (26 February 2019)

Motley reports

*Afterpay share price sinks lower on half year results release*
James Mickleboro | February 26, 2019
https://www.fool.com.au/2019/02/26/afterpay-share-price-sinks-lower-on-half-year-results-release/

The *Afterpay Touch Group Ltd* (ASX: APT) share price sank as much as 13% in early trade before rebounding. At the time of writing the payments company’s shares are down just 5% to $$19.46.

Here’s how it performed in the first half compared to the same period last year.


Underlying sales processed through the Afterpay platform increased 147% to $2.3 billion.
Active customers increased 118% to 3.1 million.
Active merchants increased 101% to 23,200.
Total income jumped 91% to $116.1 million.
Gross losses of 1.1% of underlying sales, down from 1.6%.
Late fees as a percentage of statutory income down to 17.6% from 22.5%.
Net transaction loss of 0.5%, net transaction margin flat at 2.3%.
Pro forma EBITDA excluding one-offs up 19% to $17 million.
Loss after tax of $22 million.
* How does this compare to the market’s expectations? *
According to a note out of Goldman Sachs, its analysts were expecting revenue of $113.5 million and a net loss after tax of $1.5 million.

So whilst Afterpay Touch beat on the top line, it has fallen well short on the bottom line. This may have led to investors hitting the sell button in a panic this morning.

However, it is worth noting that this loss is largely down to significant items such as share-based payments (predominantly non-cash) of $18.1 million and one-off costs related to its international business formation. If you adjust for this, its result would be largely in line with expectations.

* What’s new? *
Much of today’s result was pre-released in January with its trading update, so there were not many surprises.

But the company did update the market on some of its key metrics so far in the second half, including the continued growth in customer numbers. Since the end of the half Afterpay Touch has grown its active customer numbers by a further ~13% to approximately 3.5 million.

Similarly solid growth has been achieved with active merchants. They have increased 9% since the end of the half to 25,300.

Management also provided an update on its upcoming UK launch. According to the release, preparations continue to track to plan. It expects to officially launch in the UK market during the second half and U.S. partner URBN Group has signalled its intention to work alongside the company in the UK along with other local and international merchants.

Over in the U.S. market management appears confident on its prospects. It said: “Our experience to date confirms that the US scale-up opportunity is clear, supporting an accelerated strategy of reinvesting in the global opportunity.”

As a result, its “near-term focus is on accelerating US and international growth, investing in key brand relationships, platform innovation and broadening global support and infrastructure.” To support this the company intends to spend at least an additional $10 million in mid-term growth acceleration investment activities in the second half. This expenditure will relate to new key merchant co-marketing activities and an increase in fixed operating costs.

It certainly will be worth it if it allows the company to achieve its FY 2022 targets.

Management advised: “This accelerated growth strategy will lay the foundations for mid-term value creation. Following the intended near-term investment, we expect significant operating leverage and EBITDA growth as we scale towards our end FY22 target of over $20 billion underlying sales and net transaction margins of c.2% (post accounting changes).”

* Should you invest? *
I thought this was yet another strong half from Afterpay Touch and believe it demonstrates why it could be a fantastic buy and hold option.

It is a high risk one given the premium its shares trade at, but I’m confident its long-term growth will ultimately justify this premium.


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## galumay (26 February 2019)

bigdog said:


> and believe it demonstrates why it could be a fantastic buy and hold option.




Not sure that a business making a substantial loss, with a capitalisation largely disconnected from any form of valuation, could be seen to be a "fantastic buy and hold option".



bigdog said:


> but I’m confident its long-term growth will ultimately justify this premium.




Have you done the maths to work out just how high and consistent the growth would have to be to make the current price an investible entry point with a reasonable margin of safety? How confident are you the growth will flow to the bottom line at a sufficient margin for the above to be true?

I cant make a case for APT as an investible business at current prices, sure if you hold since IPO or similar then its clearly been a great price performer, but to pitch it as a buy and hold at current levels seems to me to be optimistic at best.


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## Knobby22 (26 February 2019)

galumay said:


> Not sure that a business making a substantial loss, with a capitalisation largely disconnected from any form of valuation, could be seen to be a "fantastic buy and hold option".




If not for the one off items they would have been profitable despite the massive growth.
You are talking like it's a little tech start-up with no financial figures.
3.1 million customers
2.3 billion in sales of which Afterpay get 4%.
As the dud customers get dropped, and existing customers rebuy the profitability increases.

Assuming growth continues, this year will be 4.4mil customers, 7 mil next year. I think this is very likely and maybe conservative with the UK next later this year.
Once they stabilise, they could easily have 40 billion in sales and get a 2% profit after all costs. Maybe in 4 years.
That equates to a profit of $800 million dollars with growth continuing. At the present capitalisation is of about 4 billion. Of course you have to wait a few years and hope something bad doesn't come out of the blue so you need to discount the price but the present price valuation isn't stretched in my view. I note Bell Potter have a valuation of $25 for this year with a big discount (85%).

I also think there is a good chance of a takeover from a big bank or MasterCard/Visa/Paypal.

I have owned CSL shares for many years and how many times have people said there overpriced? I just ignore them, growth is important. US investors are used to investing for growth (e.g. Amazon), Australian investors just think dividends. Anyone who invested in the banks and Telstra over the last 3 years will be getting a poor return.

That said, Afterpay investors should be prepared to sell if the price gets too frothy.


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## galumay (26 February 2019)

Knobby22 said:


> I note Bell Potter have a valuation of $25 for this year with a big discount (85%).




That would be enough to make me sell!! Broker recommendations are good for toilet paper and little else.

Jokes aside, i understand you optimistic arguments for future growth, i just dont see that in any way makes it a "fantastic buy and hold option". 

As I said, if you hold from a much lower entry then there is less at risk, but its definitely a speculative buy at current levels.



Knobby22 said:


> US investors are used to investing for growth (e.g. Amazon), Australian investors just think dividends.




I think its a lot more complex than that, its dangerously simplistic to think businesses built on a narrative of growth are intrinsically better investments. 

Anyway, I hope that those who hold APT continue to see the share price increase and end up rewarded for their conviction in the business.


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## Ann (26 February 2019)

Knobby22 said:


> I note Bell Potter have a valuation of $25 for this year with a big discount (85%).




*Bell Potter trader's evidence 'untruthful'*

*Stockbroker Bell Potter accused of cheating man with Alzheimer's out of $1 million*

*ASIC charges second Bell Potter adviser with fraud*

BP would not be my first choice of stockbroker...this is just the stuff you know about....what else?


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## Knobby22 (26 February 2019)

Ann said:


> *Bell Potter trader's evidence 'untruthful'*
> 
> *Stockbroker Bell Potter accused of cheating man with Alzheimer's out of $1 million*
> 
> ...



Galumay, Ann

 I don't make my buy and sell decisions through stockbrokers but I enjoy reading their research reports as I have an mba. I get the Bell Potter research because I use Bell Direct which has many useful trading tools. 

I use tech analysis to buy and sell generally and fundamental analysis to see if I am interested in a company and to size positions and maybe buying more without tech analysis report.

I note you both haven't questioned my assumptions.
 What else do you want to know Ann? Don't get your question.

One thing I will say for Bell Potter research is that I originally bought APT shares at around $8 I was pleasantly surprised by their report at the time valuing Afterpay at $23 so I do think their researcher knew his/her stuff.

I know you think this is a hyped up business Galumay but tell me where my assumptions are wrong. You previously stated that I may have confirmation bias but you might have a bias also. Afterpay appear to be going extremely well at present. It is unusual for an Australian business to succeed on the world stage in this manner, though Credit Corp has also been doing OK.


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## So_Cynical (27 February 2019)

Ann said:


> *Bell Potter trader's evidence 'untruthful'*
> 
> *Stockbroker Bell Potter accused of cheating man with Alzheimer's out of $1 million*
> 
> ...




2016 and 2012 - old news, the fraud relates to "2003 until October 2008"


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## galumay (27 February 2019)

Knobby22 said:


> It is unusual for an Australian business to succeed on the world stage in this manner,




They are making a loss.

It IS a hyped up business, its bubbly with FOMO, its tech, its a massive growth narrative, its perceived as being disruptive, its where the crowd is. 

Maybe there is a great business in there, maybe what looks like priced for perfection and beyond will come to fruition, maybe the few contrarians like me will be wrong again.

My single real point at this time is that it's naive at best to claim this is a "fantastic buy and hold" at current prices. That was the claim I took issue with, and nothing you or anyone else has said has addressed that claim in any substantive or compelling way.


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## Ann (27 February 2019)

Knobby22 said:


> What else do you want to know Ann? Don't get your question.



 Random comment Knobby, just as well ignored! 



Knobby22 said:


> I also think there is a good chance of a takeover from a big bank or MasterCard/Visa/Paypal.




I reckon you are on the money here!



Knobby22 said:


> I have owned CSL shares for many years and how many times have people said there overpriced? I just ignore them, growth is important.



There are always going to be viruses. On the short term there could be a retrace as it has fallen under the 200dsma again after it recovered from the fall below in Nov and Dec. Buying opportunity perhaps?  I bought these years ago for $2 eventually getting closed out for a darn good profit. If I had hung onto them, the profit would have been even better! 



Knobby22 said:


> That said, Afterpay investors should be prepared to sell if the price gets too frothy.




Sounds like good advice for any stock (other than CSL perhaps).


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## Knobby22 (12 March 2019)

Afterpay went though the $20 level pretty easy.
Usually whole numbers become a bit of a barrier and then a support level.


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## bigdog (27 March 2019)

Livewire reports today
https://www.livewiremarkets.com/wires/afterpay-what-s-a-billion-dollar-revenue-line-worth


 Afterpay: What's a billion-dollar revenue line worth? 

David Allingham 
Eley Griffiths Group

We acknowledge Afterpay (APT) has been one of the most talked about stocks in the Australian market. Everyone loves a 20 bagger - which is what Afterpay has been since IPO. Years of investing experience has taught us that such attention and investor enthusiasm often ends poorly for those who join ‘the party’ late. However, we still see significant upside in Afterpay over the next 3 years. Let’s take a look why.

In February, the company revealed a target Gross Merchandise Value (GMV) of $20B++ by FY2022 (see below).







_Source: Afterpay 1H19 results presentation_

This is an incredible target given:


APT only did $2.3B of GMV in 1h19 and;
Management's track record of exceeding expectations
Whilst APT hasn't broken-down the geographic split of this GMV target, our analysis would suggest it *doesn't assume any contribution from the UK business*. Perhaps the UK is the '++'?

Assuming a successful launch in the UK, the $20B GMV target could be significantly understated. This would see material upgrades to consensus GMV and customer numbers over the next 18 months. Indeed, we think it’s possible that the *US business alone could generate close to $20b GMV by FY2022*.

*US business traction*
The chart below highlights the US is scaling significantly faster than the Australian business did. We think the market is underestimating the implications this has for US GMV.








_Source: Afterpay 1H19 results presentation_



It is undeniable that the product is resonating with US millennials. One million customers have used the service within eleven months of launch and new customers grew at 4-5k per day in the first two months of the year. We think the US business has passed an inflection point, as the Australian business did, where the value of the product to merchants and consumers increases dramatically with user growth.

If it plays out like it did in Australia, customer growth could *accelerate to 10k a day and beyond*. This equates to ~3.5m new customers in the US over the next 12 months, a doubling of APT total customer base. To put it simply, the *US is scaling roughly 5x faster than Australia, in a market >10x the size. *

If we assume APT deliver $25B GMV at ~ 4% merchant fee, *then APT will generate $1b of revenue*.

APT has also guided to a 2% net transaction margin (NTM) on this revenue, implying $500m of NTM. Assuming $150m of corporate overheads would imply 350m profit before tax or NPAT of ~$250m. Given the growth profile, customer unit economics and global growth opportunity that APT will still have at this point, we would expect APT to trade on a PE of 30-40x. *This would imply a market capitalisation of $7.5-$10B or $30-40 a share*.

US investors are likely to be the marginal buyers of the stock and set the share price from here. Australian companies that have resonated with US investors have seen significant re-ratings e.g. Altium (ALU) and NextDC (NXT). US investors represent 30-40% of the NXT and ALU share registers. *US investors only represent 15% of the APT register today. *

*What about the Australian business?*
The Australian business has been somewhat overlooked in recent times. However, there has been some pleasing developments as the company has entered an optimisation phase here:


Gross losses have declined to 1.1% of underlying sales from 1.7% (outperforming most traditional credit products)
Growth in average customer spend per month has risen to $400 from $200
Percentage of customers transacting each month has doubled from ~20% to >40%
In store has grown from 9% of GMV in FY18 to 15% in 1h19 (outpacing online growth) and the market opportunity is 8x larger
NTM has expanded from 2.1% to 2.3%


*Recent initiatives*
Afterpay has also quietly undertaken the following initiatives recently:




Launched PLAY (with LayAway Travel), a new travel service with longer and more flexible instalment periods (2-12 months) and higher values. A move into the more traditional layby market.
Launched cross border transacting which will allow the large Australian customer base to transact with previously inaccessible US retailers via APT overtime.
Diversified beyond fashion into health, wellness and entertainment


These initiatives will continue to see demographics evolve beyond the millennial cohort and expand the addressable market. The Australian business also provides insight into the earnings potential for the US and the UK when they move into optimisation phase.



*A note on the people *
With assistance from Matrix Partners, Afterpay has recently hired:


Director of Engineering at Uber
Head of Risk Management at Uber
General Manager of ShopStyle
Head of Paypal UK


It is rare for an Australian company to attract the calibre of talent that APT has over the last 12 months. Shareholders should take comfort that APT has been building a world-class global team to optimise the company’s increasingly global footprint and deliver on the stated medium-term targets. It’s an endorsement of the product, the opportunity and senior executives/board.


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## galumay (27 March 2019)

Do others really think just posting articles with no analysis, research or commentary by the poster adds any value to the forum? This seems to becoming more common, members just copy and paste hype from brokers and others with no informed commentary at all. 

Between that and the TA guys that just post endless charts it means the site is not exactly awash with useful discussion about investing in businesses!


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## Smurf1976 (28 March 2019)

galumay said:


> Between that and the TA guys that just post endless charts it means the site is not exactly awash with useful discussion about investing in businesses!



I see your point but in my view it's better to have a lively forum than to have a dead forum which ends up being no forum.

If someone looking at charts is seeing something to note then knowing about that can still be relevant to a fundamental investor as a trigger to research that stock. That way you've got your own research into the fundamentals with the added aspect that "person who's good with charts likes what they see" thrown in.

Likewise for those looking at charts well if someone's saying the fundamentals are turning around or there's a huge market for this product if the company can get it to work well that's a logical trigger to take a look at the chart. At least in my mind it certainly is.

Reaching similar conclusions from different approaches always gives me more confidence in anything. Likewise if they produce conflicting conclusions then that's a red flag as to what's really going on being perhaps more complex than it seems.

Just my


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## Wysiwyg (28 March 2019)

WorldPay has entered the Aussie market and with their financial muscle may squeeze the likes of AfterPay out of the market or severely cut their market share. Yet to establish widespread connections to Aust. businesses.


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## Wysiwyg (28 March 2019)

Well WorldPay is more direct pay rather than post pay so maybe not a threat to market share.


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## Knobby22 (28 March 2019)

Wysiwyg said:


> Well WorldPay is more direct pay rather than post pay so maybe not a threat to market share.



 More an attack on the big banks.


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## bigdog (2 April 2019)

APT AFTERPAY up 40% for month!!

All time high today 23.490





852


----------



## Smurf1976 (2 April 2019)

bigdog said:


> APT AFTERPAY up 40% for month!!
> 
> All time high today 23.490



I sold at $21.....


----------



## tech/a (2 April 2019)

galumay said:


> Between that and the TA guys that just post endless charts it means the site is not exactly awash with useful discussion about investing in businesses!




Perhaps learning a little about Charting would have you view
them very differently.
Take a look at the breakouts thread. Peter was all over this.

I cant see why you'd think that discussion wasn't useful.


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## So_Cynical (2 April 2019)

Smurf1976 said:


> I sold at $21.....



 Me too - it really struggled to get thru 21


----------



## tech/a (2 April 2019)

So_Cynical said:


> Me too - it really struggled to get thru 21




If you look closely to the chart you'll notice that that struggle happens in a fairly tight range.
*Struggles occur in all time frames and in all stocks.* Eventually there are clear breakouts
OR Breakdowns. Once cleared you will generally find some good sized moves before another
struggle ensues.

If your going to exit in a long term struggle doing so at the top of the range is best
as you did.


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## bigdog (16 April 2019)

The Age reports
https://www.theage.com.au/business/banking-and-finance/us-millennials-debt-fears-help-afterpay-beat-expectations-20190415-p51eef.html?promote_channel=edmail&mbnr=MzIxMDQyMQ&eid=email:nnn-13omn658-ret_newsl-membereng:nnn-04/11/2013-business_news_am-dom-business-nnn-age-u&campaign_code=13IBU020&et_bid=29174409&list_name=2033_age_busnews_am&instance=2019-04-15--20-44--UTC

*US millennials' debt fears help Afterpay beat expectations*




*By Clancy Yeates*
April 15, 2019 — 6.22pm

Afterpay co-founder Nick Molnar says the rollout of its buy now, pay later service in the United States has beaten the company's expectations, and is being helped by millennials' aversion to debt.

The payment firm, whose value has surged to $5.9 billion in the past year, launched in the world's biggest consumer market last May, and the sheer potential of the US has been one reason for investors' enthusiasm for the stock.

Mr Molnar, the chief executive who is also leading the expansion into the US, on Monday sounded an upbeat note on its US performance, which it has previously said was on track to have 1 million customers by March.

“It’s exceeded all of our expectations,” he said at a fintech conference called AltFi in Sydney.

Mr Molnar said it had been beneficial to launch Afterpay in Australia before going to the US, but it had been uncertain about whether consumers in the US would use it in the same way that they do here. However, Mr Molnar said its target market in the US had a "more pronounced" aversion to debt than millennial customers in Australia.

“You hear anecdotes that the US is a credit-driven society, and it’s kind of like ‘OK, we’re the opposite of that, are we going to get the same uptake?’"

"And actually, we’ve found that millennials have been even more pronounced in their aversion to traditional credit products, largely because of student debt, and it’s just a different landscape,” he said.

Buy now, pay later schemes — which have proven highly popular with millennials — allow customers to receive their goods before they have paid for them. Customers must pay for the goods in fortnightly instalments, but Afterpay is not considered a form of credit under the law because interest is not charged.

Mr Molnar pointed to the impact of the global financial crisis on attitudes to debt, saying he thought this phenomena had occurred around the world.

“In Australia there’s twice as many debit card transactions now than there are credit card transactions. In the US, two out of three people aged 18 to 30 actually don’t own a credit card anymore,” he said.

Mr Molnar was also questioned about his experience in raising money for the business from Australian venture capital (VC) funds. He said the smaller size of the local VC sector meant funds were "very focused on price".

Asked about its bad debt costs, Mr Molnar pointed to a 30 per cent reduction in its bad debt expense to 1.2 per cent of its book at its latest results, which was “materially lower” than traditional credit products.

Afterpay shares fell 1.2 per cent on Monday, and have soared from $5.62 this time last year to $24.99 in the past year.

Afterpay is the most high-profile firm among Australia's growing fintech industry, much of which is targeted at parts of the big banks.

At another session at the conference, co-CEO of business lender Judo Capital, Joseph Healy, said he expected the business to obtain a banking licence in the next week. Mr Healy, a former senior National Australia Bank executive, argued banks had "a lot of hard work to do over many, many, many years" to regain "a semblance of trust" among customers.

"We all know that trust arrives on the back of a tortoise and leaves on the back of a galloping horse. And it's not something that you can flick a switch and demand that it's reinstated," he said.



All time high and included in my tips for 2019 Year Comp










417


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## lusk (16 April 2019)

> Afterpay co-founder Nick Molnar says the rollout of its buy now, pay later service in the United States has beaten the company's expectations, and is being helped by millennials' aversion to debt.
> 
> "And actually, we’ve found that millennials have been even more pronounced in their aversion to traditional credit products, *largely because of student debt*, and it’s just a different landscape,” he said.




Funny, probably because millennial's are tapped out on student debt and are not credit worthy for traditional credit products, Afterpay comes along and accepts them.

The whole thing rhymes like a ponzi, but is a good example of just following what the chart shows.


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## Knobby22 (16 April 2019)

lusk said:


> Funny, probably because millennial's are tapped out on student debt and are not credit worthy for traditional credit products, Afterpay comes along and accepts them.
> 
> The whole thing rhymes like a ponzi, but is a good example of just following what the chart shows.



No, the opposite, the millennials are weary of credit traps and so prefer Afterpay.


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## lusk (16 April 2019)

Knobby22 said:


> No, the opposite, the millennials are weary of credit traps and so prefer Afterpay.




If they were so weary they would be paying with cash up front.


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## galumay (16 April 2019)

lusk said:


> The whole thing rhymes like a ponzi,




The amazing thing is the co-founders comment was made without any sense of the irony.


----------



## Knobby22 (16 April 2019)

lusk said:


> If they were so weary they would be paying with cash up front.



My nieces are in it.
One is a trainee doctor, another a nurse, the third working for a fashion chain,
they have no debt, no credit card, some savings and they use Afterpay to balance their budget (as they all live away from home). Millennials are smart.
After pay is a free service for them.


----------



## Knobby22 (16 April 2019)

galumay said:


> The amazing thing is the co-founders comment was made without any sense of the irony.



The amazing thing is that you can't understand it despite the long explanations.

I am a fundamental investor not a trader.
Fundamental investing means understanding the business, working out cash flow, working out future profits and making estimates based on this. The Australian business is now profitable, the USA business will be in the medium term once growth slows. The UK is the next stage.

Think about it, they get nearly 4% for each transaction, they get it paid back over 8 weeks but in effect they get half of it back after 4. With two halves they can relend and make another 4%. Over a year they will make nearly 50% on the *same amount of money*. The bad debt is dropping as the system weeds out the slow and non payers.

Do some fundamental research. You have been sniping all the way up and completely missed out.


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## galumay (16 April 2019)

Knobby22 said:


> The amazing thing is that you can't understand it despite the long explanations.




Well I guess it doesn't matter, if he doesn't get the irony, and the people buying the narrative dont get the irony either!



Knobby22 said:


> Do some fundamental research. You have been sniping all the way up and completely missed out.




Knobby22, i know you are usually a fundamental investor, and I respect your opinions. 

I think you know that based on fundamental research APT is massively over priced, now its possible at some point in the future it can justify those multiples, but it certainly doesnt now. You can buy the narrative and hype - and thats fine, but dont pretend its fundamental investing.

As I am sure you also know its a very dangerous mindset for an investor to get caught up in confirmation bias, and a sure sign of that is when you start using insults to describe those who have a different thesis to you - so calling the view that AFT is overpriced and over hyped 'sniping' is a warning sign. 

Also think about the hidden biases behind the gloat of a comment like "you....completely missed out" - No investor should think like that, just as no investor should be jealous of paper or real profits others may have. I haven't missed out because it was never going to be an investible business for me, I consider it to be an unethical business model and I cant see the value, and thats fine, there are thousands of opportunities and there will be ones within my circle of competence for me to take a position in. 

I hope all those who have money in AFT get to make great returns at some point, I certainly dont wish ill of someone just because they invest in something I dont!


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## Knobby22 (16 April 2019)

You make  comments without any evidence galumay. You have been sniping and actually been called rude by another investor.
Why is it overpriced?  Also why are the banks clueless (from an earlier comment) when they lent the money to Afterpay?

It is fundamental investing. Fundamental investing is not only looking at long established companies and doing ratios on them. That's pretty low level stuff.

Of the companies I own shares in I'm sure you could price Cleanaway. CSL Credit Corp BFG (Bell Financial group) and DGR Global but probably not A2 milk, Mesoblast, MVP, Polynovo and Star Pharma (which I also own). Sure it's speculating but that does not make it fundamental investing.

If the figures for Afterpay next half year show that more defaults are occurring more than advised by the company then I will have been wrong and will sell. But I am estimating  millions of dollars of transactions earning hopefully 20% a year after costs on each dollar. In that case Afterpay is cheap.


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## leyy (16 April 2019)

It's sometimes best that we agree to disagree.

APT is in a clear uptrend, sometimes the markets may seem irrational or we feel that the price is too high or the stock is overvalued based on fundamentals and only to see the stock price go up continually.

The market is king and if demand (buyers) continue to to outweigh supply (sellers) the stock price will keep going up irrespective of price, P/E ratio and fundamentals.

I will continue to hold until the trend changes.


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## SuperGlue (16 April 2019)

*Mastercard taps into buy-now, pay-later trend with acquisition of Vyze
*
"The company announced Tuesday that it has acquired Vyze, a business that lets merchants offer financing options from various lenders both online and at the point of sale."

https://www.marketwatch.com/story/m...ition-of-vyze-2019-04-16?mod=mw_theo_homepage


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## tinhat (16 April 2019)

I've never owned this stock but it is on my watch list. Buy to ride the trend and/or hope for a takeover but don't buy on fundamentals!


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## SuperGlue (17 April 2019)

tinhat said:


> I've never owned this stock but it is on my watch list. Buy to ride the trend and/or hope for a takeover but don't buy on fundamentals!




Good thing its only on your watch list.

Ouch. 
Down 5.9%


----------



## So_Cynical (18 April 2019)

SuperGlue said:


> Good thing its only on your watch list.
> 
> Ouch.
> Down 5.9%




Yep a shocker down from a very recent all time high..like any idiot is buying this at 24 bucks.


----------



## SuperGlue (1 May 2019)

So_Cynical said:


> Yep a shocker down from a very recent all time high..like any idiot is buying this at 24 bucks.




Powering to a new high of $26.93


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## Zaxon (1 May 2019)

SuperGlue said:


> Powering to a new high of $26.93



Yup.  I bought some APT first thing this morning.  I've already made a profit.


----------



## bigdog (1 May 2019)

Reported at the Macquarie Australia investment conference in Sydney on Tuesday April 30

*Afterpay to adopt ClearPay name for UK launch*
*By Colin Kruger*
May 1, 2019 — 12.00am

https://www.smh.com.au/business/com...arpay-name-for-uk-launch-20190430-p51iix.html

Afterpay has turned its focus to the imminent launch of its buy now, pay later business in the UK where it will use the name of the business it acquired last year: Clearpay.

"We will be using the same logo, we will be using the same tech, one of the reasons why we’ve done that is that there's a number of issues that we need to deal with, and the quickest way for us to get into market was to actually use the ClearPay name," said Afterpay executive director David Hancock at the Macquarie Australia investment conference in Sydney on Tuesday.

According to figures cited by Afterpay, the UK market is worth $720 billion, with $130 billion of this online. By comparison, the Australian market is $320 billion with online worth just $30 billion.

“The UK is a really good opportunity for us to work with very large global brands,” Mr Hancock said.

In Australia, Afterpay accounts for 10 per cent of online sales, and about one in every four Millennials in Australia use the platform. This now gives the company a very influential role in the retail market in engaging its customers on behalf of retailers.

"We are the largest referrer outside of Google for leads," Mr Hancock said. "So many of our retailers really want to be on the platform because they are generating new leads for new customers."

This includes David Jones which has worked with Afterpay to increase its engagement with users which are expanding from its Millennial user base to include a growing number of 37 to 55-year-olds.

"Whilst we are a Millennial-focused company, we are seeing a halo effect of that pushing into other cohorts," said Mr Hancock.

Speaking of US competition, Mr Hancock said its product offering remains unique and "we don't see anyone as a direct competitor" to its service.

Afterpay shares closed 2.6 per cent higher at $25.59 on Tuesday.

-----------------------------------------------------------------
Todays SP very exciting per below:
Check the chart going gang busters


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## Knobby22 (1 May 2019)

I don't really like the fact that aren't using the Afterpay name.
Sure it speeds things up but the name is a real asset.


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## bigdog (1 May 2019)

APT directors shareholders are worth a lot of $

Great company

Today's closing SP was $27.300

Anthony Eisen 22,500,574 shares @ $27.30 = $614,265,670
Nicholas Molnar 22,500.000 shares @ $27.30 = $614,250,000
David Hancock 1,845,000 shares @ $27.30 = $50,368,500


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## So_Cynical (2 May 2019)

SuperGlue said:


> Powering to a new high of $26.93




I still hold one (small) parcel at 1.70 - meh.

And of course if your trend following with a stop - sure why not, but thats not my thing, i buy em cheap.
~


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## Zaxon (2 May 2019)

bigdog said:


> *Afterpay to adopt ClearPay name for UK launch*



Curiously, in the interview the CEO of Afterpay gave just yesterday to Your Money, while speaking about overseas expansion, he mentioned nothing about the UK.

https://www.yourmoney.com.au/shows/swipe/swipe-april-30-2019/


----------



## bigdog (3 May 2019)

ASX Ann today
3/05/2019 9:40:56 AM  US Receivables Warehouse Facility






Hit all time high of $28.25 today






540


----------



## Zaxon (3 May 2019)

This should greatly support APTs expansion into the US.  It's a very good sign.


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## Zaxon (4 May 2019)

Afterpay is now worth more than AMP:
APT: $6,604 Million
AMP: $6,600 Million


----------



## bigdog (7 May 2019)

*Afterpay Touch shares hit another record high.*

The *Afterpay Touch Group Ltd* (ASX: APT) share price climbed 4% to hit an all-time high of $28.70 this morning after the payments company was the subject of a positive broker note out of Ord Minnett. According to the note, the broker believes that its strong growth has continued and has increased its forecasts to reflect this. As a result, it has retained its buy rating and lifted its price target on the company’s shares to $32.30.

Included in my 2019 year tipping comp


----------



## bigdog (10 May 2019)

The Age reported today

*Afterpay rival forces name change in UK *

Buy now, pay later platform Afterpay was forced to adopt a different brand in the UK after a rival European company secured rights to use the Afterpay name in the critical market.

The European incumbent is an Amsterdam-based company owned by Arvato – the financial services arm of German conglomerate Bertelsmann.

Arvato successfully opposed Afterpay Australia’s attempt to trademark its name in the UK in June last year.

Arvato’s Afterpay offers a postpay service where online shoppers can delay payment until after they receive the goods they have purchased . Arvato’s Afterpay funds the transaction until the customer pays.

‘‘ With Afterpay you only pay for what you keep. Therefore: you pay afterwards!’’ says the company website.

Afterpay Touch, in comparison, offers a payment by instalment process over three weeks, and it also funds the transaction until its customers complete the payment.

Arvato’s Afterpay said it was the most popular post-payment service in its home base of the Netherlands , with 4 million users on its platform.

More than 70 million online purchases were made in the Netherlands last year with spending totalling €7.2 billion ($11.5 billion). Afterpay accounted for 15 per cent of these transactions.

Arvato Afterpay was approached for comment about its expansion plans. The company has held rights to the Afterpay name in the UK since February 2011. 

The UK market offers a significant growth opportunity for the Australian company after its launch into the US about eight months ago. The UK market is worth $720 billion, with $130 billion of this online, the company said.

By comparison, the Australian market is $320 billion with online worth just $30 billion, and it has rivals such as Zip, Splitit and Flexigroup .

Afterpay executive director David Hancock hinted there were problems with the name last week after confirming the company will use the name it acquired with a UK business, Clearpay, for its ‘‘ imminent’ ’ launch.

‘‘ One of the reasons why we’ve done that is that there’s a number of issues that we need to deal with and the quickest way for us to get into market was to actually use the Clearpay name ... ”

Afterpay later told the Sydney Morning Herald and The Age that its logo will provide the brand consistency across its growing operations .

Harry Dudley, an investment analyst with Afterpay investor Watermark Funds Management, said: ‘‘ I don’t think the name will really present an issue.’’

‘‘ It’s the platform itself; it’s the simplicity of the product,’’ he said.

Afterpay’s share price is predicated on the company replicating its success here in these larger overseas markets.

911


----------



## Zaxon (10 May 2019)

Personally, I think ClearPay is a weird name.  Firstly, what does the word "clear" mean in this context?  Nothing.  Secondly, if you didn't know the connection, you might not recognize ClearPay as being Afterpay Europe.


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## PZ99 (22 May 2019)

I would've called it NextPay myself...

Meanwhile: 
A small group of high-flying tech stocks are creating a market bubble on Australian Securities Exchange, echoing the conditions before the dot-com crash and the global financial crisis, investment house Perpetual has warned.

Afterpay, <snippy> have been market darlings on the ASX, with their share prices doubling on average over the past 12 months.

https://www.smh.com.au/business/com...of-asx-tech-stock-bubble-20190521-p51pmn.html

Me tipping this in the June comp will accelerate the fall I guess


----------



## Knobby22 (22 May 2019)

Nah, he's just trying to talk it down so he can get in. 

I have to admit I did sell a third to get my capital back at $27.25 as I thought it would come back a bit.
If it goes too low ($20) I will buy the shares back at the lower price.
There is danger though with the China trade wars and Brexit still being resolved (hopefully).


----------



## PZ99 (22 May 2019)

Knobby22 said:


> Nah, he's just trying to talk it down so he can get in.



That strategy would only work if I topped up my holding


----------



## Zaxon (22 May 2019)

PZ99 said:


> I would've called it NextPay myself...



I was thinking something that still reminds the user of the "real" name, but without breaching the European trademark.  Perhaps APay.


PZ99 said:


> Me tipping this in the June comp will accelerate the fall I guess



That's it!  Time to sell our shares and move to Z1P.


----------



## Toyota Lexcen (22 May 2019)

looks like a few competitors getting out there now. Heard ad on radio for 9mths pay off period


----------



## bigdog (5 June 2019)

Well below the high of $28.70 on May 7 2019

Motley reports
https://au.finance.yahoo.com/news/why-us-sent-afterpay-share-055427480.html

*Why the US update sent the Afterpay share price 7% higher*




Tristan Harrison
Motley Fool 5 June 2019

Afterpay Touch Group Ltd (ASX: APT) share price has risen more than 6% after the buy now, pay later business revealed how it’s going in the US in terms of customer numbers and retailer numbers."  The *Afterpay Touch Group Ltd* (ASX: APT) share price has risen more than 6% after the buy now, pay later business revealed how it’s going in the US in terms of customer numbers and retailer numbers.

Afterpay has only been live in the US for just over a year and has made compelling progress. Today it announced that it has partnered with Levi’s, Ray-Ban, O’Neill and Tarte Cosmetics.

Afterpay has already reached 1.5 million US customers who can now use the service when shopping at more than 3,300 retailers with another 1,000 in the process of joining up.

Since March 2019, Afterpay has increased its US customer reach by 500,000 people. Some of the US retailers that have signed up to Afterpay include Anthropologie, Bandier, DSW, Forever 21, GOAT, Morphe, Rebecca Minkoff, Reformation, REVOLVE, Skechers, Steve Madden, Sunglass hut, True Religion and Urban Outfitters.

Afterpay boasted of winning the Retail Technology Game-Changer award at the World Retail Congress in 2019. It also recently celebrated International Women’s Day with an exclusive collaboration with Forever 21. In mid-March the company’s retail partners celebrated “Afterpay Day” in Australia and the US with promotions and offers. 

Afterpay’s platform now has 30,000 retail partners across the globe. Nick Molnar, Afterpay’s CEO, said “We are thrilled to be expanding Afterpay to hundreds of thousands more shoppers in the US each month.”

Since the start of 2019 the Afterpay share price has risen by 98%.

Afterpay is growing strongly in both Australia and the US. It could be one of the best ways to profit from a shift to how younger people shop as well as paying for other services such as travel, dentistry and entertainment. 

The buy now, pay later sector is hot and I think it could be worth watching quite a few of the businesses in this space.


----------



## PZ99 (6 June 2019)

Business Update (all currency figures are in Australian dollars unless otherwise stated; where relevant figures are quoted on a pro forma basis excluding accounting changes unless otherwise stated) Afterpay Touch Group Limited (ASX: APT) (“Afterpay” or the “Company”) is pleased to provide an update in relation to key business and regulatory developments. 



Spoiler: You need 2 litres of coffee to read this :)



Global Business Update Highlights 

● Underlying sales were approximately $4.7 billion in the 11 months to 31 May 2019 (unaudited), up 143% on the prior comparable period. 

● There are over 4.3 million active customers transacting with Afterpay as at the end of May, growing at an average of approximately 7,900 new customers per day since 31 December 2018. 

● Further, Afterpay has partnered with approximately 30,600 active merchants as at the end of May, up 7,400 or 32% on 31 December 2018. 

● Afterpay maintained Gross Loss, Net Transaction Loss (NTL) and Net Transaction Margin (NTM) on a May financial year to date basis (all unaudited), broadly in line with the performance achieved in the 6-month period to 31 December 2018. This has been achieved notwithstanding the increasing contribution to underlying sales from international markets. 

● Our strategy remains focussed on global merchant and customer growth, platform innovation and global support and infrastructure given an increased appreciation of the size of our global market opportunity and confidence in our differentiated value proposition. Global expansion US Market Update 

● Growth continues to remain strong in the United States. After just over 1 year of operations Afterpay has acquired over 1.5 million active customers who are now able to shop with over 3,300 active merchants as at the end of May. There are a further 1,100 merchants in the process of integrating with the platform. 

● Afterpay US underlying sales was approximately $780m (unaudited) for the 11 months to 31 May 2019. 2 Afterpay Touch Group Limited ACN 618 280 649 Phone: 1300 100 729 Level 5, 406 Collins Street, Melbourne VIC 3000 

● Merchants that have recently gone live or signed include: Levi’s Tarte Jeffree Star Cosmetics Windsor Bandier Ray-Ban Reformation Girlfriend Collective O’Neill Lime Crime Hatch Collection ● Based on annualising the May trading numbers, the US business is generating approximately A$1.7 billion in annualised underlying sales. This was achieved within 13 months of operations in the US. By comparison, it took the Australian business approximately 3 years to achieve the same level of underlying sales. 

● Growth across the US market is being driven by customer and merchant demand and is underpinned by the expertise of Afterpay’s US and global-based staff. Future growth will be additionally supported by the US$300 million receivables funding facility announced in May. 

● NTM is increasing month on month, driven by a combination of improving Afterpay merchant fee income and stabilising losses as the business scales. In the 11 months to 31 May 2019, NTM has been positive before taking into account the impact of AASB 9. 

● Further, merchant fees in the US are trending in line with Australia. 

● The network effects of the Afterpay platform continue to add value to our merchant partners with the Company’s shop directory generating over 3.2 million retailer referrals in the month of May, in the US alone, reflecting significant month-on-month growth. UK Market Launch 

● Afterpay’s model continues to be an effective product fit in markets outside the US, Australia and New Zealand. 

● Afterpay has successfully completed a “soft test” in the UK market and is now live and transacting under the Clearpay name. 

● Afterpay has launched in the UK with the same product, business model, global technology and operating platform which has achieved success in other markets. It is this model and solution that we believe resonates most with customers and with retailers. 

● Acquiring Clearpay and adopting the Clearpay name - which has been re-launched and features the Afterpay arrows and branding - provided the flexibility to get to market faster and capture the market growth opportunity. 

● Early engagement has been positive across the Company’s initial target market with over 50 retailers in varying stages of integration. Partnerships include a mix of well recognised UK, US and Australian based retailers. 3 Afterpay Touch Group Limited ACN 618 280 649 Phone: 1300 100 729 Level 5, 406 Collins Street, Melbourne VIC 3000 

● The UK launch is being rolled out in a phased approach, starting with initial US launch partner Urban Outfitters, Inc. (URBN) whose brands include Anthropologie and Free People. 

● In terms of the UK pipeline, the Company is well progressed in further leveraging its strong existing partnerships with major international retailers across Australia, NZ and the US that have a significant UK presence. We are pleased with the progress and expect to make further announcements in the near term. 

● The UK team is being led by Carl Scheible, who joined the company several months ago. Recruitment of other key talent into the UK-based team has progressed with a number of key roles being filled. The team in the UK has now grown to 26 staff. 

● Carl is a seasoned Fintech veteran with over 20 years of leadership experience in technology, financial services and payments. He previously held a variety of leadership positions at PayPal, most recently serving as VP & Managing Director for the UK & Ireland. 

● The UK e-commerce market is the third largest in the world after China and the US1 . The addressable retail market opportunity is substantial, with online sales representing A$130 billion of a A$720 billion retail market2 . By comparison, the total Australian retail market is A$320 billion, with online accounting for roughly A$30 billion3 . 

● The changing nature of millennial spending habits in the UK presents the same opportunity to launch a pro-consumer retail service as in Australia and the US. Millennials now make up 27% of the global population4 and by 2020 will have the highest spending power at nearly US$15 trillion worldwide5 . 

● Afterpay will continue to work with its existing retail partners in Australia and the US to expand these relationships into the UK market. Australia and New Zealand 

● Afterpay’s in-store rollout in Australia and New Zealand remains strong and is becoming entrenched in the bricks and mortar retail landscape. In the 5 months to the end of May 2019, in-store represented approximately 20% of total Afterpay ANZ underlying sales, up from around 15% in 1H FY19. 

● Strong in-store growth has been exhibited to date in major Australian retailers that have onboarded during the course of FY19 and will be a continued growth focus as other large retailers (e.g. Myer) integrate Afterpay’s in-store service in FY20. 

● Close to a quarter of Afterpay’s new customer growth in Australia is currently through in-store acquisition. 1 Statistica (2019). 2 UK House of Commons (2018). 3 NAB Online Retail Index December 2018. 4 A.T. Kearney (2016). 5 Financial Times (2018). 4 Afterpay Touch Group Limited ACN 618 280 649 Phone: 1300 100 729 Level 5, 406 Collins Street, Melbourne VIC 3000 

● There are currently well over 2.7 million active customers in Australia and New Zealand who are now able to shop at approximately 27,300 merchants. New customer growth is accelerating monthon-month in Q4 (period to date), in-line with seasonal expectations. 

● Merchants that have recently gone live or signed with Afterpay in ANZ include: ONLINE REVOLVE (AU) L’Occitane (AU) Dyson (AU) Superdry (AU) Daniel Wellington (AU) Assembly Label (AU) Murad Skincare (AU) Shine On (NZ) Experience OZ (AU) Adrenaline (AU) Incu (AU) Superga (AU) NZ Muscle (NZ) XO Beauty (NZ) Okana Skincare (NZ) Bridge Climb Sydney (AU) IN-STORE Myer (AU) Oroton (AU) Decathlon (AU) Forever New (AU) Strandbags (NZ) Australian Skin Clinics (AU) Endota Spa (AU) Nutrition Warehouse (AU) New verticals Healthcare 

● In less than 10 months, more than 1,100 dental and optical practices in Australia are now offering Afterpay as an alternate payment method for customers. 

● New Dental and Optometry groups live or in the process of integrating in Australia include: Specsavers National Dental Care George and Matilda Teachers Union Health 

● Following our successful expansion into the dental and optometry segments, Afterpay is also working in partnership with TerryWhite Chemmart to trial the Afterpay service in pharmacy. 

● We are receiving strong customer feedback that Afterpay is making healthcare more affordable for Australians and allowing them to get access to the treatment they need. Afterpay for healthcare is a growing segment as more Australians opt out of private health cover, and only 45.6% of Australians are currently covered.6 6 APRA (2017). 5 Afterpay Touch Group Limited ACN 618 280 649 Phone: 1300 100 729 Level 5, 406 Collins Street, Melbourne VIC 3000 Travel 

● The pilot of Afterpay’s collaboration with Layaway Travel is underway through “PLAY” as a result of customer requests. The platform enables customers to select and book a curated holiday experience and pay for it in a series of interest-free instalments in the lead up to their departure. Regulatory Update (Australia) Product Intervention Powers (PIP) 

● In April 2019, the Federal Parliament passed the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) legislation which introduced Product Intervention Powers for ASIC which now apply to the Buy Now Pay Later (BNPL) sector.

● These powers equip ASIC with the ability to intervene where it identifies a risk of significant detriment to consumers. 

● Afterpay has consistently supported the introduction of these powers to provide the industry additional formal regulatory oversight. ● These measures, in addition to the in-built protections in the Afterpay product, further ingrain our commitment to putting customers at the forefront of everything we do. Anti-Money Laundering / Counter-Terrorism, Financing (AML/CTF) 

● In July 2018, Afterpay amended its AML/CTF compliance framework to incorporate obligations in relation to the services we provide our customers, including external identity verification and other processes for all Afterpay customers.

● Although Afterpay has not identified any money laundering or terrorism financing activity via our systems to date, Afterpay is currently in dialogue with AUSTRAC regarding issues that AUSTRAC has raised regarding our AML/CTF compliance, the outcome of which is yet to be determined. 

● As a scheduled part of our existing program, we are in the process of appointing a leading professional services firm to conduct an independent review of the design and operation of our AML/CTF framework to see if any further improvements or actions can or should be made. Credit Licence 

● Given Afterpay is not regulated by the National Credit Code and does not intend to bring a traditional credit product to market, Afterpay has cancelled its Australian Credit Licence. This Licence was acquired some time ago, prior to the report released by ASIC into the BNPL sector, the recent Senate Inquiry, and the passage of PIP legislation through the Parliament. The Licence has not been used and its cancellation will have no impact on the Afterpay business or service. 

Awards 

● Afterpay was honoured to accept the “Retail Technology Game Changer of the Year” at the World Retail Congress held on 16 May in Amsterdam. 6 Afterpay Touch Group Limited ACN 618 280 649 Phone: 1300 100 729 Level 5, 406 Collins Street, Melbourne VIC 3000 

● Afterpay was also honoured to be awarded “Best Fintech Innovator” at this year’s Australian Banking & Innovation Awards held on 22 May in Sydney. ENDS For further information, contact: Investors: Company: Media: David Hancock Group Head davidh@afterpay.com.au Christopher Stevens General Counsel & Company Secretary christopher.stevens@afterpay.com.au Melissa Patch - Cato & Clegg t) 0412 124 195 melissa@catoandclegg.com About Afterpay Touch Group Afterpay Touch Group (ATG) is a technology-driven payments company with a mission to make purchasing feel great for a global customer base. ATG comprises the Afterpay and Touch products and businesses. Afterpay is driving retail innovation by allowing leading retailers to offer a ‘buy now, receive now, pay later’ service that does not require end-customers to enter into a traditional loan or pay any upfront fees or interest to Afterpay. Afterpay currently has over 4.3 million active customers and approximately 30,600 active retail merchants on-boarded. Touch comprises innovative digital payment businesses servicing major consumer-facing organisations in the telecommunications, health and convenience retail sectors in Australia and overseas.


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## Zaxon (6 June 2019)

PZ99 said:


> Business Update



While this seems like good news, the market has reacted to it slightly negatively, current down: 
	

		
			
		

		
	





	

		
			
		

		
	
.  I've seen it suggested that the market predicted a higher level of growth.  Considering how fast APT is growing, apparently there's no pleasing so people


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## leyy (6 June 2019)

Zaxon said:


> While this seems like good news, the market has reacted to it slightly negatively, current down:
> 
> 
> 
> ...



The market reacted negatively to the Austrac and AML query.


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## Zaxon (6 June 2019)

leyy said:


> The market reacted negatively to the Austrac and AML query.



That's been suggested too.  I can't imagine that it's anything more than a compliance issue.  I don't see afterpay as really being the vehicle of choice for money laundering or terrorism funding, but the question being raised alone, could be enough to put pressure on the share price.


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## bigdog (7 June 2019)

This clipping is from the June 7 issue of The Age Digital Edition. To subscribe, visit https://theage.digitaleditions.com.au/.

Laundering fears hit Afterpay
AGE - Friday, 7 Jun 2019 - Page 28

Buy-now pay-later provider Afterpay is being probed by federal financial intelligence agency Austrac for possible breaches of anti-money laundering and counter-terrorism financing laws. 

The company confirmed it was ‘‘ in dialogue’ ’ with the regulator in a statement to the ASX yesterday. 

‘‘ Although Afterpay has not identified any money laundering or terrorism financing activity via our systems to date, Afterpay is currently in dialogue with Austrac regarding issues that Austrac has raised regarding our AML/CTF [anti-money laundering and counter-terrorism finance ] compliance , the outcome is yet to be determined,’’ it said. 

Austrac also confirmed it has been scrutinising the company. ‘‘ Austrac can confirm it has been working closely, over some time, with Afterpay in relation to AML/ CTF compliance issues,’’ it said. ‘‘ Stopping the movement of money to criminals and terrorists is a vital part of our national security defences and it is critical for regulated businesses in Australia to comply with the AML/CTF regime .’’ 

Afterpay said that in July 2018, it amended its compliance framework to include ‘‘ external identity verification and other processes for all Afterpay customers’’ . 

In a market update, Afterpay also confirmed it has launched its buy-now pay-later service in the UK market, and belatedly reported its strong performance in the US. Afterpay shares spiked as much as 10 per cent on Wednesday after the company announced in the US, that it now has 1.5 million customers in that market. Yesterday , the stock retreated 1.8 per cent to $23.45. 

The ASX update reported that Afterpay underlying merchant sales on its buy-now pay-later platform in the 11 months to May 31 were up 143 per cent to $4.7 billion. It said underlying sales in the US, based on unaudited financial data, was $780 million for that period. 

The company said it now has 4.3 million active customers on the platform and has been adding 7,900 customers a day this year. It also now has 30,600 merchants as of the end of May. 

The company said it has kept its gross loss, net transaction loss and net transaction margins broadly in line with the December half-year despite the strong growth. 

Just as importantly, Afterpay confirmed it is making strong headway in its attempt to penetrate in-store retail sales which represents a far larger opportunity than the online space where it has become a dominant player. 

Afterpay said in the five months to the end of May in-store sales grew to represent 20 per cent of its underlying sales in Australia and New Zealand, up from 15 per cent in the December half year. 

‘‘ Close to a quarter of Afterpay’s new customer growth in Australia is currently through in-store acquisition ,’’ it said. 

On Wednesday, Afterpay cofounder and chief executive Nick Molnar announced it has signed up iconic brands like Levi’s , Ray-Ban and O’Neill to its service in the US as well as announcing it has passed 1.5 million customers just one year after its launch.

Afterpay (APT) Chart


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## Miner (9 June 2019)

Thought this snippet would be interesting for some. Was posted on wrong thread earlier.

https://stockhead.com.au/news/sudde...-just-it-pushes-ahead-with-global-expansion/?


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## Ann (9 June 2019)

Had a quick glance at this chart @Miner...

I am wondering if this may be a second bearish Head and Shoulders pattern forming on APT? Note the earlier head and shoulders, which was at the all time high at the time, how the angle for the base was slanting up to the right where the two shoulders and neck connect. This tends to suggest an eventual bullish outcome for the stock once it is through with the fall back, then if you notice the most recent potential H&S at the all time high again, you will see a downward sloping line. This can indicate a longer fall away period. This is not always the case, but it is always something I watch out for. So for me this will be an interesting share to watch.


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## Zaxon (9 June 2019)

Ann said:


> you will see a downward sloping line. This can indicate a longer fall away period.



I agree with your assessment.  APT is in a longer term uptrend, but more recently, is in a short term downtrend. Hopefully that short term trend doesn't take over.

I am currently prepared to hold APT, and we'll see what happens over the new few weeks.


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## PZ99 (9 June 2019)

For what it's worth, I reckon it'll stay over $25 tomorrow, maybe $26 by weeks' end


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## Miner (9 June 2019)

PZ99 said:


> For what it's worth, I reckon it'll stay over $25 tomorrow, maybe $26 by weeks' end



It is easy to predict who will win between India and Australia in today's cricket match in England than tomorrow's APT price


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## Sdajii (10 June 2019)

Ann said:


> Had a quick glance at this chart @Miner...
> 
> I am wondering if this may be a second bearish Head and Shoulders pattern forming on APT? Note the earlier head and shoulders, which was at the all time high at the time, how the angle for the base was slanting up to the right where the two shoulders and neck connect. This tends to suggest an eventual bullish outcome for the stock once it is through with the fall back, then if you notice the most recent potential H&S at the all time high again, you will see a downward sloping line. This can indicate a longer fall away period. This is not always the case, but it is always something I watch out for. So for me this will be an interesting share to watch.
> 
> View attachment 95304




I don't always agree with your charts but I think you're probably on the money with this one.


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## Ann (10 June 2019)

Sdajii said:


> I don't always agree with your charts but I think you're probably on the money with this one.



Oh you mean like the oil charts on the POO thread when I said POO would would hit the red line resistance and probably collapse quite quickly? I know you certainly didn't agree with that one. Well sometimes I manage to read the tea-leaves correctly! 

Edit. POO = Price of Oil. It was all go down in the Commodities section.


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## aus_trader (11 June 2019)

Ann said:


> Oh you mean like the oil charts on the POO thread when I said POO would would hit the red line resistance and probably collapse quite quickly? I know you certainly didn't agree with that one. Well sometimes I manage to read the tea-leaves correctly!
> 
> Edit. POO = Price of Oil. It was all go down in the Commodities section.



POO has also been of interest to me due to direct influence of the oil ETF(ASX:OOO) that I had in the Medium/Longer Term Stock Portfolio. Managed to exit at a profit by watching the POO chart. Had I held on, that profit would have evaporated by now.


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## Sdajii (11 June 2019)

Ann said:


> Oh you mean like the oil charts on the POO thread when I said POO would would hit the red line resistance and probably collapse quite quickly? I know you certainly didn't agree with that one. Well sometimes I manage to read the tea-leaves correctly!
> 
> Edit. POO = Price of Oil. It was all go down in the Commodities section.




I knew what you meant by POO. Yes, that's an example where you were right and I was wrong. You don't always get it right, neither do I, but in this case here with APT we agree on the prediction.


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## Ann (11 June 2019)

Sdajii said:


> I knew what you meant by POO. Yes, that's an example where you were right and I was wrong. You don't always get it right, neither do I, but in this case here with APT we agree on the prediction.



I knew you knew what POO was but I just added the clarification for others who might be reading and wondering why we are charting and talking about faeces.


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## Zaxon (11 June 2019)

Afterpay has gone into a trading halt, and has announced a new capital raising:


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## Knobby22 (11 June 2019)

Capital raising to support growth.
very glad I sold a 1/3rd of the shares now to get my capital back at $27.25.
I will use the money to participate in the SPP.


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## PZ99 (11 June 2019)

I'll do the same. Straight back to 20 bucks or thereabouts I reckon.



PZ99 said:


> For what it's worth, I reckon it'll stay over $25 tomorrow, maybe $26 by weeks' end



DontlistentoanythingIsaidthenthatwasallBS


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## Zaxon (11 June 2019)




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## So_Cynical (12 June 2019)

So_Cynical said:


> (Jan 25 - 2019)Bell Potter: Our analysts share their outlook and top stock picks for 2019.
> 
> APT Price target of $23.63 ~ one of a few stocks that get a mention.
> 
> https://www.belldirect.com.au/smart..._direct/pdfs/Analyst_Stock_Picks_for_2019.pdf




Bell Potter keep issuing ambitious price targets and APT keeps on hitting them. $29.28 now - may take awhile with the cap raising.
~
https://dpsi7pmz5b6vt.cloudfront.net/uploads/wire_attachment/26/APT_6_June_2019.pdf


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## Knobby22 (12 June 2019)

The reporter John McDuling in the Age/SMH is trying to make it big news that the founders are cashing in a small part of their stake. With no dividends and being up hundreds of millions I would want to grab 20mil so I could live a good lifestyle. I think the way they are selling is ideal.

He is also harping on again about the  Afterpay being probed by Austrac over money laundering laws and the fact that "consumer groups" are upset about Afterpay now being offered by GP clinics and other allied health services.

He also goes onto say that there is a significant cohort of short sellers who are being beaten to a pulp. Could he be one of them?


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## bigdog (12 June 2019)

SP is up today above the $23.00 placement price

SPP $23.00 price looks very attractive to existing shareholders!

However, if you were successful getting SPP shares in Sept 2018 looks like you will be penalised for this SPP!!

Did I read this right?

"Shareholders on the Afterpay register at 7:00pm (Sydney time) on 7 June 2019 (Record date), with a registered address in Australia or New Zealand will be entitled to subscribe for up to $15,000 worth of Afterpay shares through the SPP (net of any SPP shares allotted in the 2018 SPP), subject to eligibility criteria and other terms and conditions of the SPP which will be set out in the SPP booklet and dispatched to eligible shareholders in due course"


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## Knobby22 (12 June 2019)

Looks like the SPP will be $23.


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## HelloU (12 June 2019)

bigdog said:


> SP is up today above the $23.00 placement price
> 
> SPP $23.00 price looks very attractive to existing shareholders!
> 
> ...



yes. ur read is correct.
(not an apt thing ....but asic type thing)


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## PZ99 (12 June 2019)

Sell 600 at $26.30 and buy 600 at $23. Free petrol for a year


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## Zaxon (12 June 2019)

PZ99 said:


> Sell 600 at $26.30 and buy 600 at $23.



The scaleback is the unknown quantity.  If you could guarantee the number of shares you'd be allocated, all sorts of party tricks are possible.


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## bigdog (12 June 2019)

Todays ASX ANN by APT included:

"Shareholders on the Afterpay register at 7:00pm (Sydney time) on 7 June 2019 (Record date), with a registered address in Australia or New Zealand will be entitled to subscribe for up to $15,000 worth of Afterpay shares through the SPP (net of any SPP shares allotted in the 2018 SPP), subject to eligibility criteria and other terms and conditions of the SPP which will be set out in the SPP booklet and dispatched to eligible shareholders in due course"

SPP ASIC page 12
https://download.asic.gov.au/media/4972674/rep605-published-20-december-2018.pdf

Transaction type:  Security purchase plans (SPP)

Eligible security holders can subscribe for up to $15,000 of securities in a 12-month period (ASX Listing Rule 7.2 Exception 15 and Class Order [CO 09/425] Share and interest purchase plans) and the total amount raised via an SPP is typically subject to a cap. The SPP offer document usually sets out the scale-back policy which is left to the discretion of the issuer.

Who can participate?    Eligible security holders


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## bigdog (13 June 2019)

SP is reaction to ASX Austrac Notice today to appoint external auditor

Afterpay’s subsidiary, Afterpay Pty Limited, received a notice from AUSTRAC on the evening of 12 June 2019 requiring it to appoint an external auditor (as authorised by AUSTRAC) to carry out an audit in respect of its AML/CTF compliance (“Notice”).  APT was informed of AUSTRAC's intention to issue this Notice after 5.00pm on that day. 








ASX Announcement today
*13/06/2019 9:51:31 AM  AUSTRAC Notice














*


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## PZ99 (13 June 2019)

Zaxon said:


> The scaleback is the unknown quantity.  If you could guarantee the number of shares you'd be allocated, all sorts of party tricks are possible.



Well I just bought the 600 back at $23.01 - not much point in doing the SPP


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## Zaxon (13 June 2019)

PZ99 said:


> Well I just bought the 600 back at $23.01 - not much point in doing the SPP



Exactly.  Job done.


----------



## aus_trader (13 June 2019)

I'm sure Ann will pick up on the H&S forming...


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## Sdajii (13 June 2019)

aus_trader said:


> I'm sure Ann will pick up on the H&S forming...




Yep, it's shaping up nicely (or, well, neatly). I wouldn't be buying in at the moment.


----------



## aus_trader (13 June 2019)

Sdajii said:


> Yep, it's shaping up nicely (or, well, neatly). I wouldn't be buying in at the moment.



I was waiting to buy it and almost did with the price surge yesterday but thought to see if it will ease a bit today to buy it. Well it did a bit more than easing ! Ditto, will wait...


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## Sdajii (13 June 2019)

aus_trader said:


> I was waiting to buy it and almost did with the price surge yesterday but thought to see if it will ease a bit today to buy it. Well it did a bit more than easing ! Ditto, will wait...




Yesterday was quite a surprise, but it formed the right shoulder quite clearly and set things up for bad times over the next few days/weeks, confirmed almost 100% today. However you look at it, there seems to be short term pain ahead. If you believe in the fundamentals, it should produce some good buying opportunities later this month and likely next. Tomorrow should see a further fairly strong drop.


----------



## sptrawler (13 June 2019)

I wonder if the external auditor, may find something, that may not be connected money laundering?
After the banking Royal Commission, I guess there may be a thorough check of the business model. Just a thought on my part.


----------



## JTLP (13 June 2019)

How would people launder money with Afterpay? Purchase good - use dirty money from bank accounts and then they’re good / on sell the good again?


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## Zaxon (13 June 2019)

Don't you hate it when terrorist organizations are funded by sending them dresses, t-shirts, and cosmetics bought via Afterpay?


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## Zaxon (13 June 2019)

sptrawler said:


> I wonder if the external auditor, may find something, that may not be connected money laundering?



I'm hoping it's more of a compliance issue than actual real ml going on.  Afterpay would have to be one of the worst ways to attempt to money launder.  You can only pay up to $1000 ($1500 later).  
You need to pay off your afterpay balance from funds from a bank.  That bank has anti-ml procedures in place already.  You're buying consumer goods, so somehow you'd need to turn that back into cash.  I can't imagine anyone doing this.


----------



## Knobby22 (13 June 2019)

I am also racking my brains how it could be a problem. The only thing that I can come up with is false Id's. Maybe it enables crims to hide how much money they are spending.


----------



## Toyota Lexcen (13 June 2019)

going on smh article, section 32 & 81 of Act not being followed

identification


----------



## bigdog (14 June 2019)

https://www.theage.com.au/business/...c-money-laundering-audit-20190613-p51xff.html

*Afterpay founders under scrutiny with AUSTRAC money laundering audit*





*By Colin Kruger*
June 13, 2019 — 6.08pm

Afterpay’s board, including the founders who sold more than $100 million worth of shares this week, will come under scrutiny after Australia's financial crime watchdog AUSTRAC demanded an external audit of its compliance with anti-money laundering and counter-terrorism financing laws.

"The audit will help identify if Afterpay has developed and implemented the systems and controls it needs to ensure it complies with its obligations," AUSTRAC chief executive Nicole Rose said in a statement on Thursday.

She added that AUSTRAC “will not hesitate to take action where an organisation is failing to appropriately protect itself and Australia’s financial system from criminal activity”.

The notice served to Afterpay by AUSTRAC states the regulator has "reasonable grounds to suspect that Afterpay is a reporting entity that has contravened and/or is contravening sections 32 and 81 of the AML/CTF [anti-money-laundering and counter-terrorism financing] Act".

The two sections relate to the requirement to identify customers and maintain an AML/CTF program.

In April last year, Afterpay was forced to change its processes after a report from Ownership Matters detailed how minors could use the service to $300 of alcohol with an account registered to Mickey Mouse.

The external auditor will look into matters dating back to January 19, 2015 “including senior management/board level involvement” with the company’s decisions regarding the drafting and approval of “all versions of its AML/CTF program” and the company’s general compliance with the related laws.

The notice said the audit report must include details of any provisions of the AML/CTF Act that the “external auditor concludes Afterpay has not complied with or is not complying with”.

Afterpay's shares plunged as much as 12 per cent to a low of $22.55 on Thursday – below the $23 which investors paid for their shares in the company's $317 million capital raising on Monday.

The company's co-founders David Hancock, Anthony Eisen and Nick Molnar also conducted a sell-down of their combined stake worth more than $100 million, timed to coincide with the capital raising. There is no suggestion that the co-founders' sell-down was prompted by the AUSTRAC notice.






Afterpay disclosed in a market update last week, ahead of the capital raising, that it was being scrutinised by AUSTRAC for possible breaches. In a response to the regulator's notice on Thursday, it said it did not know of the regulator's decision to order an external audit until it was received on Wednesday evening, but noted that the risk of this had been "previously identified".

"Beyond the update as to AUSTRAC's issue of the notice, Afterpay does not currently have any material information which is in addition to the disclosures made in the investor presentation released to the ASX on June 11, 2019, and the risk factor regarding AML/CTF laws," it said.

The news rattled listed fintech stocks like Prospa which plunged 7.3 per cent to $3.80, just above its IPO price of $3.78. Afterpay rivals, Zip Co and Splitit, each closed 5 per cent lower at $2.87 and 69.5c respectively.

Zip Co told the _Sydney Morning Herald_ and _The Age_ that it conducts credit and ID checks on every applicant utilising numerous independent data sources to verify the identity of all applications.

"There is no current dialogue with AUSTRAC in relation to Zip AML/ CTF policies," it said.

According to the AUSTRAC notice, which Afterpay lodged with the ASX, the company has 14 days to nominate three or more external auditors which the regulator will consider.

Within 60 days of the external auditor being engaged, Afterpay must provide AUSTRAC with the auditor’s preliminary findings, and a final audit report must be ready within 120 days.

The audit will be conducted at Afterpay’s expense.


----------



## Klogg (14 June 2019)

Toyota Lexcen said:


> going on smh article, section 32 & 81 of Act not being followed
> 
> identification




I can't see how the model is sustainable in its current form, if they're required to ID every applicant.

Taking 20 minutes to ID a person, to buy a $40 pair of pants seems ridiculous and unworkable


----------



## Zaxon (14 June 2019)

Klogg said:


> I can't see how the model is sustainable in its current form, if they're required to ID every applicant.



There are services like what ISX provides, should they need to go down that path.


----------



## omac (14 June 2019)

Could it also be fake retailers? 
A good way to wash funds from stolen credit cards, especially is you only need 25% down as a new customer in the first two weeks.


----------



## Zaxon (14 June 2019)

omac said:


> Could it also be fake retailers?



In theory.  But unlike accepting credit card payments, APT has only signed up more major retailers, as far as I know.  You won't be buying your newspaper at your local milk bar on afterpay anytime soon.


----------



## Ann (14 June 2019)

OK, fully formed H&S after yesterday. It is still sitting above the neckline around $22, so there is still a chance of a bounce off the neckline, mind you I wouldn't be rushing to buy just at this stage, brass balls award to anyone who does!


----------



## Zaxon (14 June 2019)

Ann said:


> I wouldn't be rushing to buy just at this stage



Yup.  I will be selling out if it slides much further.


----------



## omac (14 June 2019)

Zaxon said:


> In theory.  But unlike accepting credit card payments, APT has only signed up more major retailers, as far as I know.  You won't be buying your newspaper at your local milk bar on afterpay anytime soon.




According to the FY18 report and HY19 presentation they added 5500 merchants in 6 months, that's ~40/day. That's the ASX300 and FTSE 250 in two weeks (assuming 5 day weeks), they can't all be major retailers....


----------



## Klogg (14 June 2019)

omac said:


> Could it also be fake retailers?
> A good way to wash funds from stolen credit cards, especially is you only need 25% down as a new customer in the first two weeks.






omac said:


> According to the FY18 report and HY19 presentation they added 5500 merchants in 6 months, that's ~40/day. That's the ASX300 and FTSE 250 in two weeks (assuming 5 day weeks), they can't all be major retailers....




Very good point! I imagine this is a very easy way to launder money if you're not verifying the merchant. And the fee is only 4%...


----------



## Zaxon (14 June 2019)

omac said:


> According to the FY18 report and HY19 presentation they added 5500 merchants in 6 months, that's ~40/day. That's the ASX300 and FTSE 250 in two weeks (assuming 5 day weeks), they can't all be major retailers....



Perhaps not then.  Does anyone know any mom & pop business that accepts afterpay?


----------



## Klogg (14 June 2019)

Zaxon said:


> Perhaps not then.  Does anyone know any mom & pop business that accepts afterpay?



I don't think you'll see anyone that's laundering money, advertising that they're registered with Afterpay.

You can submit a merchant enquiry here:
https://www.afterpay.com/en-AU/merchant-enquiry

I've submitted an enquiry, let's see what happens (I assume they would have already altered some of their processes)


----------



## PZ99 (14 June 2019)

Latest > https://www.afterpay.com/en-AU/categories/new

Don't think you'll find too many of these on the ASX


----------



## Zaxon (14 June 2019)

Klogg said:


> I've submitted an enquiry, let's see what happens



You own a "special service" laundromat?


----------



## Zaxon (14 June 2019)

PZ99 said:


> Latest > https://www.afterpay.com/en-AU/categories/new
> 
> Don't think you'll find too many of these on the ASX




OK.  This looks like just a single beauty store, not a chain or big business.


----------



## bigdog (14 June 2019)




----------



## Ann (14 June 2019)

This is an article from a couple of days ago...
*Afterpay raises $300m as founders sell down stock*

_Buy Now Pay Later (BNPL) lender Afterpay Touch (ASX: APT) has completed a capital raising of more than $300 million to fund its global market expansion, at the same time as its co-founders sell down their stock.


The company emerged from a trading halt on Tuesday to unveil the capital raising and today announced the successful completion of a fully underwritten institutional placement of 13.8 million ordinary shares at $23 per share – above the $21.75 floor price – to raise $317.2 million.


Meanwhile, Afterpay disclosed three directors including co-founders Anthony Eisen and Nicholas Molnar as well as group executive David Hancock would sell down their stock concurrent with the placement.


The market can often respond negatively to this as investors may consider this move as a company executive’s lack of confidence in the stock.


However, the sell-down of 2.05 million shares each from Mr Eisen and Molnar and 400,000 from Mr Hancock has been allocated to US cornerstone investors Tiger Management and Woodson Capital.


Tiger is a private equity giant with investments in businesses including music streaming platform Spotify and payment software company Square. More..._


----------



## PZ99 (14 June 2019)

Sub 21's - down the swanny


----------



## bigdog (14 June 2019)

ASX 
14/06/2019 4:58:39 PM Response to ASX Query

ASX is requesting information from APT 

APT is pleased to provide the following responses in relation to your letter.

https://www.asx.com.au/asxpdf/20190614/pdf/445vrrggtrtj1l.pdf

High today $23.10 and low of $20.96

Currently no need wait for the SPP price of $23!!


----------



## sptrawler (14 June 2019)

It does ring of a buy now pay later, if you can, Bank.
Wasn't that, what the Banking Royal Commission, was about?
Suspect loans, to people who couldn't afford them?
Didn't we all say, hoorah at last suspect lending, taken to task?


----------



## Zaxon (15 June 2019)

sptrawler said:


> Wasn't that, what the Banking Royal Commission, was about?
> Suspect loans, to people who couldn't afford them?
> Didn't we all say, hoorah at last suspect lending, taken to task?



BNPLs, such as APT, are nothing like suspect lending.  They're a type of limited credit, but why they're so popular with millennials is that they're a much safer product to use.

A credit card: will charge you a high interest rate (currently around 14%).  Unless you pay your balance off in full, interest will be added to your balance.  You then pay interest on top of your interest.  So compounding interest.  Plus CCs have a yearly fee.

Afterpay: 4 installment payments.  No interest.  No yearly fees.  If you miss a payment, you'll be charged a small fixed fee (not an interest rate based on your balance).  Your fees are capped.  If you get multiple fees, they cap out and you're charged no more fees.  There's no spiralling compound interest.  

Safeguards that are in place are: you can't make any more purchases, unless you're up-to-date with your payments.  Up-to-date means you're paying zero fees.  Secondly, if you start missing payments, Afterpay will just totally cut you off and refuse you as a customer.

BNPLs are deliberately trying to not have their customers fall into a debt trap.


----------



## Ann (15 June 2019)

If anyone is interested I thought I would look at the APT chart. Over the week it has formed a full Head and Shoulders pattern at the pinnacle of its all time high price. This is seen as a bearish pattern. However I am not writing off APT just yet. I can see on the chart three current levels of support all around the $21+ level. There are two lines of support (green lines) coming from the earlier Head & Shoulders pattern, one from the neckline and one from the tip of the head from the previous H&S. Added to that APT is sitting right on top of the 38.2% Fibonacci level. So currently three levels of support. If these three support levels are failed then the next line of support could be the 50% level at around $19.50. If this is breached then we have the Fibonacci 61.8% which coincides with the major 200dsma at around $17.50. It has touched and bounced up twice from this level. If it touches this level and bounces up it would seem like a full on buy to me, depending on what the rest of the market is doing at the time.


----------



## Knobby22 (17 June 2019)

I think the question is what is the best that can happen and what is the worst that can happen?

Worst is that there is extensive problems with money laundering and AUSTRAC hit the company with massive fines and heavy implementation issues have to be undertaken to ensure it doesn't reoccur. Also a class action from big investors ensuring we get hurt more.

The best is that very little or no money laundering is detected and we go back to where we were.

I really don't know where this lies, probably in between. I wish I knew a bit more about what AUSTRAC are worried about.

I note the SPP hasn't proceeded yet. The price will be the volume weighted average of the last 5 days before due and maybe they don't want to give us cheap shares and depress the price further.


----------



## PZ99 (17 June 2019)

Life's too short


----------



## Sdajii (17 June 2019)

Between the head and shoulders, money laundering murmours, SPP, etc, this is looking like coming up for quite a fall. No surprise the shorters are having a play.

I see jubilant holders across the road bouncing around talking about $50 but $15 looks far more realistic at least in the short term. $10-12 wouldn't even surprise me too much (neither would staying above $18).


----------



## bigdog (18 June 2019)

https://www.theage.com.au/business/...n-afterpay-and-investors-20190617-p51yls.html

*AUSTRAC concerns weigh on Afterpay and investors*
*By Colin Kruger*
June 17, 2019 — 7.30pm

The securities regulator says it is continuing to monitor Afterpay closely after issuing two 'please explain' notices in the space of a week, and even loyal investors have taken issue with the timing of the $300 million raising and the action by the financial crime watchdog.

"I think it certainly doesn’t read very well, and the timing really kind of stinks,” said Afterpay investor Cyan Investment Management's Dean Fergie.

Shares in the buy now, pay later payment platform sunk another 6 per cent on Monday to close at $20.27.

Afterpay has lost more than 20 per cent of its market value since Australia's financial crime watchdog AUSTRAC demanded an external audit of its compliance with anti-money laundering and counter-terrorism financing laws last week


----------



## Sdajii (18 June 2019)

They've done well to more or less hold $20. Maybe $19.98 was the bottom. I'd be a little surprised but we'll see.


----------



## bigdog (26 June 2019)

ASX Announcement today

26/06/2019 9:56:41 AM   *AUSTRAC Process, SPP & Co-Founder Intentions*


----------



## Knobby22 (26 June 2019)

Appears to me from above that Eisen and Molnar are pretty confident the audit will not be a major problem.


----------



## bigdog (27 June 2019)

https://www.theage.com.au/business/...-an-independent-chairman-20190626-p521jt.html

*Afterpay needs to grow up, and appoint an independent chairman*

*Elizabeth Knight*
Business columnist
June 27, 2019 — 12.01am

It is difficult to think of an Australian start-up that has grown as rapidly as Afterpay Touch. The buy now, pay later service listed at $1 only three years ago with a value of $125 million. Today it’s a global business worth $6.7 billion with big ambitions.

So it needs to grow up.

With a lot more investor money at stake, Afterpay needs to fill out its much-expanded skin.

There is nothing wrong with retaining its entrepreneurial DNA - but its governance and operating systems need to be fit for purpose. The oversight of this company needs to have fresh independent eyes.

You really have to question whether its two founders, Nick Molnar and Anthony Eisen should have offloaded almost $100 million worth of shares earlier this month. While completely legal, it falls into the basket of a dubious judgement call.

Finding itself the subject of an AUSTRAC probe is another situation that should have been avoided. The collision of these two events should definitely have been circumvented. Having both these events take place while raising equity - that feels imprudent even though (again) legal.

An obvious way to score some easy runs would be appointing an independent chairman and a couple more independent directors.

And it is never a good look to receive numerous queries from the ASX on disclosure.

Plus, there was the scandal last year around underage kids buying alcohol using Afterpay and fake accounts being set up to use Afterpay. The company said at the time that it would upgrade its systems to address these customer abuses.

Sure, the company can learn from these issues but courtesy of its size, it needs to do this quickly. There is no room for growing pains or indigestion.

An obvious way to score some easy runs in this regard would be appointing an independent chairman and a couple more independent directors.

Having said all that, Afterpay shareholders should take heart from Wednesday’s announcement that Molner and Eisen have instituted a self-imposed escrow on the remainder of their own shares for the next year.

It was a sensible move. Investors understandably get rattled when founders and major shareholders cash in big licks of shares. This sign of commitment was probably the major factor in the stock’s 5.5 percent rise on Wednesday.

The company’s decision to put its share purchase plan (SPP) on ice for a while was also prudent. The SSP was an opportunity for existing shareholders to acquire new shares following this month’s $317 million fully subscribed share placement. It won’t proceed until an external audit has been completed and approved by AUSTRAC.

The company says it reserves the right to ditch the retail offer - which is sensible but won’t necessarily make smaller shareholders overjoyed.

The company has given AUSTRAC the details of three candidates to undertake the audit of the company’s compliance with anti-money laundering and anti-terrorism financing laws.

It impressed on investors that it took the audit ‘very seriously’.

While some of these stumbles have bumped around the share price, its steep northward trajectory suggests investors have been inclined to overlook risks and keep their eyes on the broader prize of exporting the business offshore.

While Afterpay is one of the best performing stocks on the ASX this year, it still doesn’t turn a profit.

It reported a larger than expected loss of $22 million in the half to December 2018 even though it grew its active customers by 118 percent and its merchant income by 140 percent and reduced its net transaction loss is at the lower end of the projected range.

But it is Afterpay’s expansion into the US that is providing the blue sky.

Whether a cynic or a supporter, the fact remains that shareholders have made a lot of money from an investment in Afterpay. But a bit of governance discipline is still sorely needed.

744


----------



## leyy (28 June 2019)

Was trading well for most of the day. Huge dump late this afternoon, closed 10% lower...

Maybe some news that hasn't been announced yet?

Looks suspicious.


----------



## slo20 (28 June 2019)

leyy said:


> Was trading well for most of the day. Huge dump late this afternoon, closed 10% lower...
> 
> Maybe some news that hasn't been announced yet?
> 
> Looks suspicious.



The news is that visa have announced they will be entering the buy now pay later market https://usa.visa.com/about-visa/newsroom/press-releases.releaseId.16441.html


----------



## bigdog (29 June 2019)

The big price drop was from about 3:23 PM


Motley Fool reported Another player!!

https://www.fool.com.au/2019/06/28/...canada-launch-a-threat-to-afterpay-in-the-us/

*Is Sezzle’s growth and Canada launch a threat to Afterpay in the US?*
Tom Richardson | June 28, 2019

It’s probably the hottest stock on the* S&P/ ASX200* (ASX: XJO) right now and the *Afterpay* (ASX: APT) share price hit a record high of $28.70 this morning. So many market participants will be asking why have Afterpay shares climbed 9.6x since June 2017 and to another record high today?

Over the past couple of years the shares are up due to the success of the company in getting all of its key operating metrics to travel in the right direction. Such as underlying sales, active customers, active retailers, total income, gross losses, and net transaction loss.

In particular its early success in growing its U.S. business surprised the market and has really turbocharged its valuation. However, it may be facing a credible rival in the U.S. named *Sezzle*, but more on that later.

Over the short term though the share price is swinging more on sentiment than actual operating updates.

For example investors have been variously worried and then relieved over a senate inquiry into the business and now an upcoming audit of its AML/KYC obligations and policies.

As the shares are so popular they’re also heavily traded by day traders looking to profit from short term momentum by scanning moving averages, charts, and other historical price action to take a position on which way the share price may move over a matter of minutes, hours, days, or weeks.

For example a popular trading strategy is to buy shares at 52-week highs in the belief that shares breaching record highs are more likely than not to move higher over the short term.

Other day traders even like to buy companies before they potentially hit round number values such as $100 in the belief that history shows a stock will then usually rise after breaching a psychologically important round number!

Other traders believe if a stock breaks a 20, 50, or 100 day moving average price to the down or upside then that is also a buy or sell signal as momentum under relative strength indices (RSIs) as an oscillator is important. Alongside order books and the market depth behind a stock.

Inter-war U.S. trader *Jesse Livermore* originally popularised many related trading strategies under a general method he described as “tape reading” because stock prices used to literally be printed out on tape, before electronic screens existed.

Livermore’s “tape reading” method has now metamorphised into the electronic age via any number of traders all promoting their own strategies related to price action and technical analysis.

Recently, professional algorithmic, “robot”, quant, or high frequency trading has also become a more influential part of short term stock price movements, although covering this would require another article.

Given Afterpay’s phenomenal rise it’s likely a lot of the short-term price action is down to traders attempting to jump on and off this freight train for a quick profit.

Ultimately though it’ll be Afterpay’s growth rates and underlying financial performance that decide the direction of the share price from here. I remain bullish on its growth prospects, but whether its valuation has got ahead of itself is a question for debate.

Notably it does have an emerging rival in the U.S. named* Sezzle *that recently launched in Canada signing up sportswear giant *Kappa* as a marquee retail client.

According to a source it now has 3,321 active merchants across 12 countries and 269,800 active customers.

This is roughly comparable to the 3,300 merchants Afterpay reported it had signed up in the US by the end of May, although interestingly Afterpay reported it had 1.5 million active customers more than 5x the number of Sezzle despite them having similar retailer numbers. I could only guess as to the reasons for the difference.

Sezzle then looks a potentially credible rival to Afterpay in the U.S. and much more so than the underwhelming *Splitit Ltd* (ASX: SPT).

Sezzle is also reportedly preparing its prospectus ahead of an upcoming ASX listing that could be hot if past history is any guide.


----------



## PZ99 (1 July 2019)

Nice flash crash on Friday arvo. Looking ready to drop like a stone today. Sub 22's maybe.


----------



## PZ99 (1 July 2019)

And a ticket to boot

Partial quote from the ann this morning:

3. If the answer to question 1 is “no”, is there any other explanation that APT may have for the recent trading in its securities?

In answering this question, please comment on an article in the online edition of the Australian Financial Review by Sarah Thompson and Anthony Macdonald entitled

‘Sting in the tail at Afterpay as shares fall sharply’ which suggests that investors have reacted to a Visa Card announcing it would pilot a ‘suite of Visa’s instalment solutions’ which will enable customers to opt to pay for transactions via instalments using a Visa card’. Afterpay Touch Group Limited ACN 618 280 649 Phone: 1300 100 729 Level 5, 406 Collins Street, Melbourne VIC 3000 Media reporting may have influenced the recent trading in APT securities however APT is unable to confirm that the change in price or increase in volume was specifically related to this factor. There are many factors which may influence the intraday price and trading volume of listed securities. We note that other ASX listed companies operating in this sector (including Zip Co (ASX:Z1P) and Splitit Payments (ASX:SPT)) also experienced similar movements in share price over the same period.

Fin Riv article > Sting in the tail at Afterpay as shares fall sharply

https://www.afr.com/street-talk/sting-in-the-tail-at-afterpay-as-shares-fall-sharply-20190628-p522cd


----------



## bigdog (1 July 2019)

APT down 7.1% on open this morning







*ASX Announcement today*

APT 1/07/2019 9:43:11 AM  Response to ASX Price Query


----------



## Knobby22 (1 July 2019)

Sold all my remaining Afterpay shares except for a sias holding at $22.52 at open.
As most are aware all my shares are on a loan so I can't afford to lose capital.

I figure that all the automated/system traders will be selling over the next two days.
I may buy back in at a lower price especially if it drops to below $15. I don't think the model is completely broken. Also have the SPP option should I be wrong to at least get a few shares back.

My big hope was that Mastercard or Visa would buy them out; not go into competition.


----------



## SensibleInvesting (2 July 2019)

Recently, there's been a significant amount of volatility in the Afterpay share price. More recently, there's been some doomsdaying about Visa planning to release their BNPL service.

What's interesting is that, Mastercard had tried this twice - once back in 2016, and once in September 2018. Despite this, Afterpay continues to grow and dominate the retail segment, which begs the question: why will people behave any differently this time around to Visa, that they didn't do to Mastercard?

In the video, I deep dive into Afterpay's Web and Mobile traffic numbers, interest, backlinks, referrals, interest over time, in their 3 core markets: USA, UK, AUS.


----------



## bigdog (2 July 2019)

ASX ANN today
_2/07/2019 8:59:57 AM    APT Board & Organisational Update

The Afterpay Touch Group share price was higher after announcing  a change of CEO and an overhaul of its board. One of the many changes sees co-founder Anthony Eisen replace fellow co-founder and current CEO Nick Molnar in the top job. Mr Molnar will become the company’s Global Chief Revenue Officer.









_


----------



## Knobby22 (9 July 2019)

My decision to sell most of my holding was very poor. Misjudgment of the intelligence of the market. Need to look at buying in at higher price.


----------



## Skate (9 July 2019)

Knobby22 said:


> My decision to sell most of my holding was very poor. Misjudgment of the intelligence of the market. Need to look at buying in at higher price.




@Knobby22 I feel your pain. Systematic trading doesn't always get it right.






Skate.


----------



## bigdog (11 July 2019)

The Age reports today
https://www.theage.com.au/business/...rpay-in-battle-with-visa-20190710-p525z9.html

*AFIC backs Afterpay in battle with Visa*
*By John McDuling*
July 11, 2019 — 12.00am

One of the nation's biggest investment houses has backed Afterpay's ability to withstand a challenge from credit card giant Visa, as Goldman Sachs cut its forecasts and urged the company to step up innovation to remain ahead of its rivals.

Australian Foundation Investment Company chairman Mark Freeman said he was watching Visa's entry to the 'buy now, pay later' market closely, but he was optimistic Afterpay could beat back its advances.

"Afterpay have established an entrenched user base now...You just have to walk around shops and see how it's being used," he said. "It's up to Visa to try and disrupt that."

AFIC, founded in 1928, holds Afterpay shares in its Mirrabooka, ASX-listed investment company. And Mr Freeman said he expects to hold the highly polarising stock for the long term. "We want to be part of the company for the long term, it's doing everything we want to see a company do," he said.

In a research note distributed to clients on Wednesday, Goldman Sachs analysts Ashwini Chandra and Grace Fulton downgraded their recommendation on Afterpay to 'neutral' from 'buy' and lowered their price and earnings forecasts for the company.

Goldman has been one of the most prominent bulls in Afterpay during its meteoric rise. It added the stock to its 'buy' list in June last year, and since then it has increased by more than 200 per cent. The broker said the company continues to execute strongly in the US, and the downgrade was made largely on the basis of its valuation.

Visa sent Afterpay shares tumbling last month when it said it was planning to enter the instalment payments market the Australian company pioneered. Yet while some investors appeared to view the credit card giant's entry to the buy now, pay later market as a threat to Afterpay,  Goldman said on Wednesday "we do not consider this likely".

It said questions remain around how Visa's product will be structured, whether it could cannibalise its existing credit card offerings, and how it will be funded, it said.

Afterpay currently charges merchants a 4 per cent fee on each transaction processed through its platform. Users are not charged any interest on purchases but are hit with late fees if products are not paid off on time, in four instalments.

Visa's credit cards are typically issued through banks, and Goldman said it did not think they would wear the cost of a new instalments product.

"We think it unlikely banks will absorb this cost themselves," the analysts wrote. "If banks choose to charge the consumer, there exists risk consumers could view the product as relatively less attractive than the [Afterpay] model which is free to the user if all payments are made on time.

"If the banks choose to charge the merchants, this would require them to negotiate agreements with each merchant individually."

Afterpay faces a growing array of competitors in the US and UK, which are much bigger markets than Australia and central to bullish hopes about the company's potential. These include Affirm, a venture-backed startup founded by Max Levchin,  a member of the so-called 'PayPal mafia', Stockholm based Klarna and products issued by financial industry incumbents.

Goldman Sachs said the company needs to ramp up innovation to stay ahead of these rivals, by developing new products or better harnessing the data it collects.

The Goldman Sachs downgrade comes after an eventful few weeks for Afterpay during which its three co-founders sold shares worth $100 million, the company raised $300 million in fresh capital, it was issued with multiple 'please explain' notices by the ASX, and financial crimes regulator AUSTRAC said it was investigating the company over potential breaches of money laundering laws.

Afterpay shares closed 10¢ lower at $25.59.

770


----------



## bigdog (17 July 2019)

Motley Fool Reports today
https://www.fool.com.au/2019/07/16/...with-larger-stake-in-tech-start-up-change-up/

*Afterpay aims to expand moat with larger stake in tech start-up Change Up*

Tom Richardson | July 16, 2019 | *More on: * *APT* *Z1P* *AAPL* *V*

*Afterpay Touch Group Ltd* (ASX: APT) short sellers or ‘bears’ often claim it does not have much of a moat or competitive advantage to defend itself from competition from credible rivals like *Visa Inc*, *Z1p Co Ltd* (ASX: Z1P), *Klarna* or *Sezzle*. 

However, one of its competitive advantages now comes via the size of its network. For example in Australia if you’re a millennial or retailer and want to use buy now, pay later services you’re going to use Afterpay as it easily has the most retailers and service providers such as dentists or budget airlines like *Jetstar*.

The more retailers Afterpay has the more shoppers it attracts and vice versa. This shows how the multiplier power of a network effect has built many great businesses. 

It would be difficult for a competitor to gain much traction against it in Australia now, as Afterpay has market dominance and consumers are unlikely to switch to multiple accounts.

In fact the only thing that could shake its grip on Australia is probably a very deep-pocketed competitor prepared to wear many years of losses in the hope it can take market share by offering retailers much lower fees. 

An important way companies can build out strong network effects or ‘moats’ is by adding ancillary services to their core products that keep consumers locked in their eco-system.

U.S. tech giant *Apple Inc.* is a good example with its iTunes, Apple Pay, Apple TV, and iCloud services among others that keep users replacing their iPhones or Macs. 

While on the topic of eco-systems, _The Australian_ newspaper is today *reporting *that Afterpay has lifted its stake in Swedish fintech start-up *Change Up* to 45 per cent.

Afterpay reportedly inherited its original stake in Change Up after its transformational merger with *Touchcorp* in 2017 that set the joint business on its way to blockbuster success.

The *Change Up* app is powered by *Touchcorp* payments technology and allows retailers in Scandinavia to pay shoppers their change digitally, which eliminates the need to carry small coins around in your pockets or purse.

Afterpay also reports the app helps retailers increase sales by integrating promotions with electronic discount codes, while it also potentially widens Afterpay’s network effect or eco-system if it could be offered to all its retailers or consumers.

These kind of digital change or automated change saving fintech apps like *Acorns*, *Chime* and *Digit* are quite common globally, but the challenge they all face is gaining the scale to make them profitable.

For example back at university only one friend of mine had a mobile phone, it was a great product, but he had no one to call, until the network effect was built out.

A company with Afterpay’s network can provide that platform straight up to a product like Change Up to give it a potential major leg up ahead of its many competitors. 

_The Australian_ did not report any financial terms of the deal and Afterpay has not confirmed the deal or whether it got any change digitally.  Given Afterpay now has over $317 million cash on hand after a recent capital raising it won’t be material to its balance sheet.

The stock has been on the slide over the last week as investors digest the Visa news and a warning from *Goldman Sachs* that competition is strong in the UK.

Shares closed yesterday at $23.79.


----------



## leyy (18 July 2019)

A big announcement @afterpayusa tonight with a BIG beauty brand launch


----------



## So_Cynical (19 July 2019)

ASX investor day Morgans presentation, video filmed a bit over a week ago, Afterpay discussion starts at 23.20, worth watching.
~


----------



## barney (22 July 2019)

Looking at this purely as a technical observer … neither negative nor positive view.

Couple of digs at the $28 high .. currently rejected on diminishing Volume

Previous high Volume bars to the daily low of $22.50 … important level in the short term.

Small Range formed recent days $23.40-$24.40 on lower relative Volume.

Above the short term Range and the most recent High Volume Bar at >$24.40 would feel a lot more comfortable in the short term if holding. 

Below $22.50 not good.


----------



## bigdog (23 July 2019)

Today's Herald Sun; very encouraging for AFT with a reduction of 810,000 credit cards reported since the start of last year!

*More Australians are ditching their credit cards to switch to new-age schemes or improve their financial position.*

New borrower behaviours are killing off credit card accounts

https://www.heraldsun.com.au/lifest...s/news-story/a5d5628ce93b2eb208c8fc09609fb96b






5432


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## bigdog (26 July 2019)

Motley Fool reports today
https://www.fool.com.au/2019/07/26/will-afterpay-be-disrupted-by-another-bnpl-provider-in-australia/

*Will Afterpay be disrupted by another BNPL provider in Australia?*
James Mickleboro | July 26, 2019

The *Afterpay Touch Group Ltd* (ASX: APT) share price will be one to watch this morning after reports of yet another new entrant to the buy now pay later (BNPL) market in Australia.

According to the AFR, Latitude Financial is planning to bring its BNPL platform to Australia in the near future.

*What is Latitude Financial?*
Latitude Financial, formerly known as GE Money, is Australia’s largest non-bank lender and has been widely tipped to list on the ASX later this year after pulling its ~$5 billion IPO last year.

It counts the likes of KKR, Varde Partners, and Deutsche Bank as shareholders, with all three reportedly keen to test the appetite of investors with an IPO.

At present its New Zealand-based business offers a BNPL product named Genoapay.

Genoapay allows Kiwi consumers the opportunity to buy products and services needed today, but pay for them over 10 weekly instalments. The platform is available in thousands of locations throughout New Zealand including retailers such as *Harvey Norman Holdings Limited* (ASX: HVN), Playtech, and Furniture Zone.

As with fellow BNPL providers Afterpay and *Zip Co Ltd* (ASX: Z1P), the signup process takes just a couple of minutes and includes Genoapay performing a real time credit check to let the user know how much they can spend.

*Crowded market.*
If Genoapay does in fact launch in Australia, it will certainly make for a crowded market.

Consumers can already choose from Afterpay, Zip Co, *Splitit Ltd* (ASX: SPT), and the *FlexiGroup Limited* (ASX: FXL) BNPL service, humm. Then there’s the probable arrival of US-based Sezzle in the near future.

It is expected to list on the Australian share market next week with a valuation of ~$220 million. Sezzle raised almost $44 million to fund its expansion, which is likely to include a foray into the Australian market.

And then there’s payments giant Visa, which recently revealed that it has its eyes on the fast-growing market.

With so many companies trying to win the attention of both retailers and consumers, I feel there is a danger that a price war could break out and impact the profitability of the industry.

I think it might be a little soon to panic, though. But I would suggest investors keep a close eye on how the market develops over the coming 12 months.

In the meantime, if you like exciting shares like Afterpay and Zip Co then I think you'll love this hot small cap stock which has been tipped for very big things.


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## bigdog (7 August 2019)

CBA ASX half yearly announcements today included:

CBA has also announced on Wednesday its entry into the 'buy now, pay later' sector, saying it has invested $US100 million in Klarna, a European payments fintech valued at $US5.5 billion that has 60 million customers. CBA will partner with Klarna to expand its service into Australia and New Zealand, in competition with Afterpay.


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## sptrawler (7 August 2019)

Where there is an easy dollar to be made or lost, it wont take long for the space to become crowded.


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## sptrawler (15 August 2019)

Buy now pay later companies, starting to come under the spotlight. 
The big problem I see with this payment method, as opposed to lay by is you take the product home, so there is no cooling off period.
With layby, people could just walk away from their minimal deposit, if they got home and after a few days had second thoughts.

https://www.abc.net.au/news/2019-08...s-regulation-afterpay-complaints-zip/11416996
From the article:
_Corporate regulator, the Australian Securities and Investments Commission (ASIC), is also keeping a close eye on the sector and now has the ability to use its product intervention power if it sees consumers are losing out.

It found that more than 40 per cent of users had incomes of less than $40,000 and many were students or working part time.

It also discovered outstanding debt was growing fast, to the tune of more than $900 million in June 2018.

ASIC hasn't decided if the sector should be subject to responsible lending laws like other credit providers ._


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## tinhat (15 August 2019)

sptrawler said:


> Buy now pay later companies, starting to come under the spotlight.
> The big problem I see with this payment method, as opposed to lay by is you take the product home, so there is no cooling off period.
> With layby, people could just walk away from their minimal deposit, if they got home and after a few days had second thoughts.
> 
> ...




Despite the fact that I am somewhat skeptical about this company's long term prospects,  I;ve had a buy order in the market for some time and it might get triggered soon. Rather small speckie punt.

Without giving my judgement or political commentary on it all, speaking from a cynical point of view, it's a rather convenient ROAR from the regulator who promised more bite through the Royal Commissions process.


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## sptrawler (15 August 2019)

tinhat said:


> Despite the fact that I am somewhat skeptical about this company's long term prospects,  I;ve had a buy order in the market for some time and it might get triggered soon. Rather small speckie punt.
> 
> Without giving my judgement or political commentary on it all, speaking from a cynical point of view, it's a rather convenient ROAR from the regulator who promised more bite through the Royal Commissions process.



Agree with your sentiments exactly.


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## rnr (15 August 2019)

@tinhat 

Without giving my judgement or political commentary on it all, speaking from a cynical point of view, *it's a rather convenient ROAR from the regulator who promised more bite through the Royal Commissions process.
*
Gotta love your sense of humor!


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## Value Hunter (18 August 2019)

The problem I have with after pay is that it is a commodity business with limited network effect. It also doesn't have the same high switching costs that a lot of subscription software companies, etc have. They have a good brand name and a first mover advantage in some markets but I am not convinced that is sufficient to be confident they will still be dominating the space in ten years time. It is flying high at the moment but it could easily crash and burn.


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## Knobby22 (18 August 2019)

Value Hunter said:


> The problem I have with after pay is that it is a commodity business with limited network effect. It also doesn't have the same high switching costs that a lot of subscription software companies, etc have. They have a good brand name and a first mover advantage in some markets but I am not convinced that is sufficient to be confident they will still be dominating the space in ten years time. It is flying high at the moment but it could easily crash and burn.



It's interesting that CBA have bought five percent of a European company that is similar for exclusive Australian rights.

I don't think the company will be around in 10 years because if it successful it will be taken over long before then.

That said I hardly own any at present but am eligible for the SPP which acts as an option.


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## bigdog (28 August 2019)

*ASX announcement today
28/08/2019 9:36:27 AM FY2019 Results Announcement*
file uploaded below

Afterpay has entered into agreements with VISA which will form the basis of a strategic partnership to support the development of innovative new solutions and business growth in the US market.

The agreements will facilitate the ability for Afterpay to expand the delivery of its services to merchants and customers in a more flexible and efficient manner. Management advised that both Afterpay and VISA see significant scope for collaboration for their mutual benefit.


















677


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## Knobby22 (28 August 2019)

Oh well, they are going to get involved in the evil Empire of VISA.
Good news, though I rather enjoyed the fact that AfterPay were getting the kids off credit cards for the good of society.  I wonder how they will work together? One would be credit risk, another would be setting up an account like Zip does for bigger sales.


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## bigdog (24 September 2019)

According to a July 29 2019 announcement out of Afterpay the interim audit report is due to be submitted to AUSTRAC today September 24 with the final audit report due by November 23 2019.

Will check ASX announcements tomorrow


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## bigdog (25 September 2019)

ASX Announcement today
25/09/2019 9:25:55 AM *AUSTRAC Update* - Interim Report at end of posting
*
Includes following statement in report:
*
As previously stated, Afterpay has not identified any money laundering or terrorism financing activity via our systems to date. Afterpay’s systems include several features that help to control our money laundering and terrorism financing risk, including the implementation of strict spending limits. Afterpay is used by our customers for discrete, small value (around $150 average), non-cash transactions and does not allow for international funds transfers.
*










*
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## bigdog (25 September 2019)

https://www.streetinsider.com/Hot+U...T:AU)+(AFTPF)+to+Conviction+Buy/15941058.html

Goldman Sachs Upgrades Afterpay Touch (APT:AU) (AFTPF) to Conviction Buy
September 24, 2019 6:20 AM EDT Goldman Sachs analyst Ashwini Chandra ..

Goldman Sachs has upgraded Afterpay Touch’s shares from a neutral rating to a buy rating and added them to its conviction list. The broker has also lifted the price target on its shares to a lofty $42.90, which implies potential upside of 35% over the next 12 months.


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## leyy (6 October 2019)

Sold out of afterpay last week at $35 just shy of all time highs.

I think there may be more bad news coming as a result of the Austrac investigation.

The question remains still if they contravened the   act or not.

If the interim audit was positive and they did not contravene the act. The result is binary either yes or no. As they did not announce this I think there is much higher probability of some bad news coming.

I still believe in the business model and feel that they have a long way to go up. 

Will definitely look to jump back in when this retraces.


As always DYOR.


Cheers
Leyy


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## bigdog (9 October 2019)

Todays Age reports
Afterpay down on professor’s analysis
AGE - Wednesday, 9 Oct 2019 - Page 31

Shares in Afterpay Touch were down as much as 3 per cent on Tuesday following comments from a respected New Yorkbased business professor , Scott Galloway.

He posted a YouTube video saying several buy now, pay later startups were susceptible to being railroaded by larger companies such as Visa and Mastercard because they don’t have what he called strong ‘‘ moats’’ .

“These stocks will likely be halved in the next 12 months as Visa rolls out its product and the entire market begins to shudder with yet another duopoly firm crushing competition ,’’ he said.

Also looming over the share price is the fact executive director David Hancock’s voluntary escrow on $136 million worth of shares has now expired. However, he is unlikely to be able to sell straight away given Afterpay has just handed AUSTRAC its audit report and the contents of the report are not widely known beyond the Afterpay boardroom . Shares closed down 0.86 per cent to $34.62.

*Todays ASX announcement reports David Hancock has retired as director*
8/10/2019 5:32:55 PM Resignation of Director - David Hancock










775


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## Knobby22 (9 October 2019)

Interesting.


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## bigdog (15 October 2019)

Afterpay Touch share price hit all time high of $37.41 this morning after the sell side research desk at Morgan Stanley released a research note tipping the stock to hit $44 over the next 12 months.

Morgan Stanley joins other brokers Goldman Sachs and Bell Potter in tipping the shares to move higher.

Reported in August that as at June 30 2019 Afterpay had 32,300 merchants providing buy-now-pay-later services to 4.3 million shoppers. It was also reportedly adding around 12,000 new shoppers a day in ANZ, the US and UK.






963


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## bigdog (16 October 2019)

Afterpay share price crashed today where UBS has slapped a sell rating and lowly $17.25 price target.

UBS believes that excessive growth has already been priced into its share price.

UBS believes there are regulatory risks to consider.

UBS also has concerns over the U.S. market. It suspects that competition could increase materially and weigh on its margins in the key market. Overall, it doesn’t believe the company’s average transaction value per customer will match the levels enjoyed in the ANZ market.

Previously reported:
Morgan Stanley joins other brokers Goldman Sachs and Bell Potter in tipping the shares to move higher.

*at 12:17 PM was:*


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## bigdog (17 October 2019)

Afterpay SP continued to fall after UBS update

Investors continued selling after it was the subject of a bearish broker note.

On Wednesday analysts at UBS initiated coverage on the company with a sell rating and $17.25 price target. It believes excessive growth is already priced in and has concerns over regulatory risks

Low today of $31.64 with 70 million total shares sold $226 million





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## bigdog (20 October 2019)

The buy now, pay later sector is going to be looked by the Reserve Bank of Australia (RBA).

Merchants are not allowed pass on the costs that Afterpay charges, so the RBA is going to consider whether this needs a policy change.


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## sptrawler (20 October 2019)

bigdog said:


> The buy now, pay later sector is going to be looked by the Reserve Bank of Australia (RBA).
> 
> Merchants are not allowed pass on the costs that Afterpay charges, so the RBA is going to consider whether this needs a policy change.



It must be worrying the RBA, when everyone can just elect to spend next weeks pay, before they earn it with no regulatory oversight.
Recipe for disaster IMO.


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## Knobby22 (20 October 2019)

They can do that with credit cards to a much larger amount.


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## sptrawler (20 October 2019)

Knobby22 said:


> They can do that with credit cards to a much larger amount.



Yes good point knobby.


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## jandrews (4 November 2019)

Found a great free newsletter that has touched on APT a couple of times. Some great insights.

https://insufficientcapital.com/2019/08/31/insufficient-capital-august/

I would highly recommend, subscribing to this newsletter. Great insights in general.


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## aus_trader (5 November 2019)

jandrews said:


> Found a great free newsletter that has touched on APT a couple of times. Some great insights.
> 
> https://insufficientcapital.com/2019/08/31/insufficient-capital-august/
> 
> I would highly recommend, subscribing to this newsletter. Great insights in general.




Funny name for a fund/newsletter, but interesting reading nevertheless.


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## bigdog (13 November 2019)

AGM was held this morning in Melbourne






The APT Business Update (file uploaded)

At the end of October, the company’s global underlying sales reached $2.7 billion. This was a massive 110% increase on the prior corresponding period. This comprises ANZ underlying sales of $1.9 billion, US underlying sales of $0.7 billion, and UK underlying sales of over $100 million.

At the end of the period its underlying sales had increased to over $8.5 billion on an annualized basis and that’s before the all-important holiday period.

During October, Afterpay signed up an average of 15,000 new customers per day.

A number of major brands have either recently integrated or are in the process of onboarding. This includes ecommerce giant eBay (Australia), Ulta, Finish Line, and Marks & Spencer. Afterpay is also launching with David Jones and Myer Holdings Ltd (ASX: MYR) in-store.

The deal with eBay Australia is expected to go live in the 2020 calendar year.

Entered into a strategic partnership with Mastercard in the Australian market to help scale Afterpay’s business and deliver services to merchants with greater efficiency and flexibility. In addition, Afterpay will utilise Mastercard data and services and technology capabilities. Further information on this collaboration will be provided as products and services are introduced to the Australian market.

SP shares surged as much as 10% higher before giving back all their gains and sinking lower with high of $31.98 and currently $28.97

Also discovered today that Afterpay is available for bookings made online at Jetstar.com for all Jetstar Airways (JQ) Australian domestic and international flights where you see the Afterpay logo and a price breakdown at the bottom of the page.






9046


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## bigdog (13 November 2019)

Also announced today was the details of its new strategic partnership Coatue Management may have played a role in some investors selling their shares today.

Here are the key features of the deal:


$200 million private placement with the US based technology investor
Completion of placement to happen later this month at $28.50
Price of $28.50 is a 2.4% discount to five-day VWAP as of Tuesday
12 month escrow arrangement
Funds to be used to fund global expansion
So when shares are issued at a discount, it’s not uncommon to see the share price fall to a comparable level.

From ASX announcement today






78


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## Knobby22 (13 November 2019)

I'm still waiting for the SPP.


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## Ferret (13 November 2019)

Knobby22 said:


> I'm still waiting for the SPP.



Ha ha - me too!


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## frugal.rock (13 November 2019)

Good one Big Dog.
I couldn't resist, after I saw it at 10% up on yesterday's close SP, I said to myself, 'i am gunna get me some of the honky tonk action'.
So I waits for the elasticity of human? (sheep) sentiment, and bought in after it hit bottom and bounced back at around -3% below yesters SP. Out on close.
It was certainly pumpin today, and I witnessed gap ups/ downs of 50c literally in seconds in the earlier part of the day.
A profit of $ 134 for a little boogie woogie, not bad aye. Better than a poke in the eye. Might have to trade dafteray again, today was a first.
Cheers Al,
F.Rock


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## bigdog (14 November 2019)

Knobby22 said:


> I'm still waiting for the SPP.




At AGM yesterday
Afterpay has deferred its planned shareholder purchase plan @ $30 pending the outcome of the AUSTRAC audit but Ms Rubin told shareholders the company remains committed to it.

One shareholder suggested a $400 million SPP for retail shareholders and not the $30 million announced!

Nick Molnar announced that Afterpay did not report defaulting debtors credit file data  to credit reporting bureaus!

I would expect the SP will head upwards today

I hold APT


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## bigdog (14 November 2019)

https://www.afr.com/rear-window/david-hancock-s-wife-sells-1-5m-afterpay-shares-20191113-p53a6x

*David Hancock's wife sells $1.5m Afterpay shares*
Between October 8 and October 31, Fiona Hancock sold 50,000 of her 950,000 ordinary Afterpay shares.

When Afterpay Touch announced on July 2 that executive director and “Group Head” *David Hancock* was stepping down “at the conclusion of 2019 financial year-end matters”, the company assured investors that “David will facilitate the transition of his role to [co-founder *Anthony Eisen*] and other members of the leadership team for a period of up to 12 months”.

When Hancock resigned from the board on October 8, the announcement was that “David is stepping down as a director and will continue in a role with the company as a consultant”.

*Window dressing*
But Hancock’s role with the company as a consultant ended on the morning of October 18, having lasted just seven business days. Surprise, surprise, it was all just another hearty helping of Eisen’s formidable window dressing.

And sometime between October 8 – when Afterpay lodged Hancock’s final director’s interest notice – and October 31, David’s wife *Fiona Hancock *sold 50,000 of her 950,000 ordinary Afterpay shares, raising between $1.4 million and $1.8 million in a volatile three weeks for the stock.

They are what’s left of the 2.5 million shares awarded to David (but issued in Fiona’s name) in Afterpay’s 2016 float at $1 per share. Equity granted in the course of employment being issued to the employee's spouse – sounds like a trick question at the ATO's staff trivia night.

The 3Z notice classified Fiona's shares in which David Hancock isn't the registered holder but has a "relevant interest" under Section 608 of the Corporations Act. A person holds a relevant interest if they have "power to exercise ... a right to vote attached to" shares, or "power to dispose of" them.

After Australia’s financial crimes authority AUSTRAC ordered Afterpay to appoint an external auditor to report on its compliance with the anti-money laundering and counter-terrorism financing law on June 12, the board formed a subcommittee dedicated to the regulator’s inquiry. As a member of that subcommittee, Hancock was privy to the contents of auditor *Neil Jeans*’ interim report, provided to the company on September 24 (the announcement of which the following day Afterpay designated as "price sensitive").

Afterpay circumscribed the interim report “confidential” despite AUSTRAC confirming that the company was free to release it. Just how material to the share price the report’s contents are remains to be seen.

But while David Hancock was in possession of that confidential, price-sensitive information being freely withheld from his fellow shareholders, his wife trousered $1.5 million disposing of stock (in which, on October 8, he held a relevant interest).

“This is a matter for Mrs Hancock,” we were told by an Afterpay spokesperson. “The sale of shares occurred after Mr Hancock had ceased to be a director … and a full-time employee [of] the company.”

Notably, David has not exercised a single one of his 2.9 million options (2.7 million of them exercisable at $2.70 and 200,000 at $1). Won’t that be a red-letter day?!






337


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## bigdog (14 November 2019)

https://www.theaustralian.com.au › business › trading-day
9 mins ago - _"Bell Potter's_ Lafitani Sotiriou has raised his price target on Afterpay by 9pc to _$45.50_ and reiterated his Buy rating based on his view that the ........."

Bell Potter is reportedly bullish on Afterpay’s deal with eBay citing it as evidence that AfterPay is becoming a leading global payments player.

Yesterday Goldman Sachs slapped a $42.90 price target on the shares and noted an additional new partnership with U.S. payments giant MasterCard.


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## WolfInvestor22 (18 November 2019)

After pay target set as steep as $44 by Morgan Stanley . There is no doubt BNPL companies will be the talking point of 2020 but will AfterPay continue its infamous growth ? 

https://youth-investment-group.com/...-heres-how-you-can-capitalise-on-apt-in-2020/
https://l.facebook.com/l.php?u=http...WNIeg3iceMzfMVMnFsFTNqnhR4ryWwod05vFb1reoD6tQ


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## PatrickBateman62 (18 November 2019)

Very informative. Afterpay is one to talk about right now, especially with Morgan Stanley's target price. What are you're thoughts on ZIP right now?


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## WolfInvestor22 (18 November 2019)

https://youth-investment-group.com/...-time-to-join-the-zip-train-or-was-ubs-right/


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## bigdog (25 November 2019)

*ASX Announcement today AUSTRAC Update - Final Audit Report (uploaded)

Share price at 10:15 today*

*




*
The Independent Auditor has confirmed that Afterpay's current program is aligned with the AML/CTF Act and that Afterpay is a low risk business in regards to its vulnerability to be used for money laundering or terrorist financing. The Auditor also notes that Afterpay has a strong compliance culture and recommends Afterpay continues to maintain its current level of Board and senior management oversight of AML/CTF compliance as the business grows.*
*
Afterpay reaffirms that it has not identified any money laundering or terrorism financing activity via our systems to date.*


Findings:*

Governance and Oversight – over the course of Afterpay’s evolution from a start up to an ASX 100 company, Board and Senior Management oversight and governance has matured significantly. There is now an appropriate level of awareness and engagement.
Understanding Risk – Afterpay is a low risk business in regards to its vulnerability to be used for money laundering or terrorist financing. Notwithstanding this, the risk controls in place must remain commensurate with business growth. Afterpay must enhance its existing controls to identify Politically Exposed Persons (PEPs) and the risk they may pose. It is noted that Afterpay have commenced a project to address this issue.
AML/CTF Program – Afterpay’s AML/CTF Program has also evolved over time and is now appropriately aligned to the AML/CTF Act and Rules. Afterpay commenced to provide designated services from February 2015. The first AML/CTF Program was finalised in June 2016.
Key AML/CTF Controls – Based upon legal advice in 2016, Afterpay initially focused its AML/CTF controls upon merchants. Afterpay’s current AML/CTF controls are more appropriately focused on consumers, given the Designated Service Afterpay provides.
*Six Recommendations*

Board and Senior Management oversight and governance of compliance with AML/CTF Act and Rules – The auditor recommends that the Afterpay board continues to maintain its current level of Board and Senior Management oversight of AML/CTF compliance as the business grows.
Low Risk Designated Services Exemption – In the auditor’s opinion, Afterpay’s service poses a low ML/TF risk. As such, it encourages Afterpay to engage AUSTRAC regarding its buy-now pay-later service being formally designated as low ML/TF risk in the AML/CTF Rules.
Compliance with applicable customer identification procedures – Another recommendation is for Afterpay to engage with AUSTRAC about its historic approach to consumer identity verification, which was outside of the safe harbour set out in the AML/CTF Rules.
Compliance with politically exposed person (PEP) identification and risk management requirements – Afterpay should ensure it complies with all of Parts 4.1.3 and 4.13 of the AML/CTF Rules regarding the identification and management of the risk of politically exposed person (PEPs) using the service.
Compliance with ongoing customer due diligence requirements – Afterpay should review the application of its enhanced customer due diligence procedures to ensure the processes are applied proportionately with regard to the ML/TF risk posed by the consumer.
Suspicious matter reporting content – Afterpay should continue to evolve its procedures to ensure all actionable information or intelligence available to it is included in suspicious matter reports submitted to AUSTRAC.
I hold

017


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## bigdog (26 November 2019)

https://www.afr.com/companies/finan...-1trn-addressable-market-call-20190925-p52uqg

*Afterpay shares surge on Goldman upgrade*

Shares in Afterpay surged by more than 13 per cent after the buy-now pay-later juggernaut updated the market on its anti-money laundering audit while Goldman Sachs upgraded its share price target on the stock to $42.90

In a note sent to clients Goldman Sachs says Afterpay is chasing a $1 trillion opportunity to capture retail payment transactions in Australia, the United States and the United Kingdom and said customers were using the platform more frequently making it a more valuable business.

The upgrade added to bullish analyst calls and helped push the stock to an all time intra day high of $36.65 before closing at $36.99

Out of the 10 analysts covering the stock, seven have a buy rating, two a hold rating while one analyst from Morningstar maintains a sell on the stock with the consensus price target of $35.85.

Afterpay is up more than three times this year and almost 50 per cent higher than the $23 price of its controversial June capital raising and founder sell down

I look forward to the $23 per share SPP offer to existing shareholders that has been deferred since June 2019 and hope that the $35 million SPP is increased

I hold

098


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## Knobby22 (26 November 2019)

Fingers crossed. I somehow think they may not set it at $23.  I bought a few extra yesterday anyway.

It's funny that some people say it's not reputable yet they have the clean skin now and Westpac are the company that enables paedophiles.


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## Toyota Lexcen (26 November 2019)

Why did they have to deal with AUSTRAC?

They are not providing credit or are they?


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## Knobby22 (26 November 2019)

It's not about credit, its about using money for crime.

This is their own words:
Australian Transaction Reports and Analysis Centre is an Australian government financial intelligence agency set up to monitor financial transactions to identify money laundering, organised crime, tax evasion, welfare fraud and terrorism. AUSTRAC was established in 1989 under the Financial Transaction Reports Act 1988 to implement in Australia the recommendations of the Financial Action Task Force


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## Toyota Lexcen (26 November 2019)

thanks knobby


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## bigdog (26 November 2019)

Knobby22 said:


> Fingers crossed. I somehow think they may not set it at $23.  I bought a few extra yesterday anyway..




I was at the AGM and APT confirmed SPP $23 is the price; someone suggested raising $400 million where note below reports $30 million SPP

SPP is awaiting sign off by AUSTRAC before proceeding and acceptance of audit report submitted!


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## Knobby22 (2 December 2019)

New name,  they have removed the Touch.
Also I notice they tapped another private investor, US based technology investor Coatue Management at$28.50 a share which will help justify the SPP. 

I have done a small amount of research on this company, the founder Phillippe Laffont has become a billionaire from tech.


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## sptrawler (2 December 2019)

I have no understanding why, but it still scares the hell out of me, another opportunity lost?


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## frugal.rock (2 December 2019)

sptrawler said:


> I have no understanding why, but it still scares the hell out of me, another opportunity lost?



The way I see it, based on the posts above, if the SPP goes ahead, it would be highly probable that another opportunity presents itself... just sayin my thoughts out loud. 
If I held, I would be looking at dumping soon and hopping on for the return journey. 
Definitely not financial advice.
F.Rock


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## sptrawler (2 December 2019)

Have any Australian Financial Institutions signed up?


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## System (4 December 2019)

On December 4th, 2019, Afterpay Touch Group Limited changed its name to Afterpay Limited.


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## bigdog (4 December 2019)

sptrawler said:


> Have any Australian Financial Institutions signed up?




Australian Financial Institutions
ASX Ann. 12/06/2019 9:44:09 AM Successful Completion of $317.2 million Capital Raising

The next day was AUSTRAC notice announced
ASX Ann. 13/06/2019 9:51:31 AM AUSTRAC Notice

ASX Ann. 4/07/2019 4:25:49 PM Shareholder Letter - Share Purchase Plan Deferral
-- SPP deferred unitl after AUSTRAC completed and could be early 2020 and still $23 for total $30 million.  Hoping for higher than $30 million!!


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## bigdog (5 December 2019)

ASX announcement today 
Media Release- Black Friday & Cyber Monday (uploaded)

For November 2019
- New Customers for November 500,000  (total active 6.6 million)
- Underlying sales $1.0 billion (4% commission = $40 million for the month)












610


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## bigdog (6 December 2019)

ASX Announcement today
6/12/2019 1:21:39 PM 2 Afterpay Share Purchase Plan (file uploaded)

Shares issued under the SPP will be issued at the lower of $23.00, being the price of the institutional placement that was undertaken and announced on 12 June 2019

Shareholders on the Afterpay register at 7:00pm (Sydney time) on 7 June 2019 (Record Date), with a current registered address in Australia or New Zealand will be entitled to apply for up to $15,000 worth of Afterpay shares through the SPP

The SPP is capped at $30 million.

Will they accept over an oversubscribed SPP like they did in June for the institutional Placement of new shares in June 2019????

The June 2019 institutional Placement of new shares in Afterpay (New Shares) to eligible investors, to raise a minimum of $300m.  This was oversubscribed  and $317 million was accepted






694


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## Knobby22 (6 December 2019)

bigdog said:


> ASX Announcement today
> 6/12/2019 1:21:39 PM 2 Afterpay Share Purchase Plan (uploaded)
> The SPP is capped at $30 million.
> 
> ...




I doubt they will give much more than 30 million, bigdog. I will put in for the maximum and hope. Will be happy if I get $5,000 worth.

I was thinking they would have the SPP as soon as possible, when you said it would be next year I was a bit surprised. I think the timing with the recent dip is good and its a promise they need to resolve in a timely manner as possible.


----------



## bigdog (6 December 2019)

Knobby22 the dates are below:

In the 2018 SPP, I subscribed the full amount and was allotted 574 shares which I was happy with


----------



## Knobby22 (27 December 2019)

This is my pick for January.
SPP has artificially lowered the price.
Will bounce back in January but probably not as much as Z1P which is also lower mainly for the same reasons.

The disadvantage it has compared to Z1P is that the SPP shares are provided in January and there are always a few shareholders who can't wait and take the instant profit.


----------



## frugal.rock (27 December 2019)

Knobby22 said:


> This is my pick for January.
> SPP has artificially lowered the price.
> Will bounce back in January but probably not as much as Z1P which is also lower mainly for the same reasons.
> 
> The disadvantage it has compared to Z1P is that the SPP shares are provided in January and there are always a few shareholders who can't wait and take the instant profit.



I take it you do know the SPP is likely to be at $23 per share unless the price drops rapidly in the next 2 weeks to make it lower? (5 day VWAP)
Seems like an inverted situation to Z1P...
F.Rock


----------



## Knobby22 (27 December 2019)

frugal.rock said:


> I take it you do know the SPP is likely to be at $23 per share unless the price drops rapidly in the next 2 weeks to make it lower? (5 day VWAP)
> Seems like an inverted situation to Z1P...
> F.Rock



The SP price is a lot lower though as was held off. The price won't drop to that level as it is too large a drop.


----------



## frugal.rock (27 December 2019)

Knobby22 said:


> The SP price is a lot lower though as was held off. The price won't drop to that level as it is too large a drop.



Ok then. If you say so.


Stranger things have happened.
I think won't is a dangerous word.
The February comp might be a good entry IMO.
Cheers. F.Rock
PS, just sayin my thoughts. I hope for investors sake me wrong.


----------



## Knobby22 (27 December 2019)

Watch and learn.


----------



## frugal.rock (27 December 2019)

Knobby22 said:


> Watch and learn.



Ok.
I must profess I am a novice.
But, I have learnt that 'won't and 'will' have their own lives on the stock market. They do what they want, when they want, how they want.
However, this stock keeps surprising...
Cheers.


----------



## bigdog (2 January 2020)

ASX announcement today
2/01/2020 10:18:00 AM *  Regulatory Update - California, US  *

APT was granted a California finance lender’s license through the California Department of Business Oversight (DBO) in November. This license remains valid today. Also applied for the license to facilitate its potential future expansion into other service offerings in the US that align with its business model.

Share price currently up 3.86% today

Rival SZL Sezzle revealed it has been denied the same license this morning and SP currently down 18% today
-- SZL announcement 2/01/2020 9:55:45 AM   California Financing Law License Update











672


----------



## Knobby22 (4 January 2020)

Companies like Sezzle with poor ethics always end up getting in trouble. 

Afterpay has a licence on Calfornia and I expect is still expanding quickly.
Can't wait to see the next report.

If I was Afterpay the next step would be to consider listing in the USA.


----------



## Knobby22 (4 January 2020)

I should say the 'appearance of poor ethics.'


----------



## bigdog (17 January 2020)

SPP closing date was 5:00 PM today

I have subscribed for SPP (should be $23 per share)

Looking like $10 profit for SPP!!

SPP was for $30 million and I imagine will be heavily over subscribed

Will not know until Wednesday Jan 22!!











225


----------



## frugal.rock (17 January 2020)

Knobby22 said:


> Companies like Sezzle with poor ethics always end up getting in trouble.



Well I am glad they did in get in trouble, a rap on the knuckles, then they got their California license announced today also.
Good volatility of a reasonable sized stock because of getting in trouble!  Can't comment on the ethics side, didn't do much FA, just TA.
F.Rock


----------



## Ferret (17 January 2020)

bigdog said:


> SPP closing date was 5:00 PM today
> 
> I have subscribed for SPP (should be $23 per share)




I stumped up for the 15k which would be 652 shares. My guess is I might get 50 shares.


----------



## Knobby22 (18 January 2020)

Ferret said:


> I stumped up for the 15k which would be 652 shares. My guess is I might get 50 shares.



I am hoping for 200. (Tell him he is dreaming).


----------



## frugal.rock (18 January 2020)

Knobby22 said:


> Watch and learn.



Touche old chap.
If one was watching this, it got down to 28.5~29..went sideways in December but closed stronger.

With around 1.35 million shares coming on to the market Thursday 30th January, no doubt a few profit takers and possibly a nice setup for buyers.
F.Rock


----------



## Knobby22 (18 January 2020)

frugal.rock said:


> Touche old chap.
> If one was watching this, it got down to 28.5~29..went sideways in December but closed stronger.
> 
> With around 1.35 million shares coming on to the market Thursday 30th January, no doubt a few profit takers and possibly a nice setup for buyers.
> F.Rock



Not going to be enough sellers and many who wish they had more. Atypical SPP.


----------



## Zaxon (18 January 2020)

I thought I would post the guesses from the https://www.aussiestockforums.com/threads/z1p-apt-prediction-competition.35127 thread directly into APT discussion area, to get a feel for what these predictions would look like.


----------



## Zaxon (18 January 2020)

This is the APT yearly chart:


----------



## Zaxon (18 January 2020)

This is everyone's prediction extending that chart:


----------



## barney (18 January 2020)

Zaxon said:


> This is the APT yearly chart:




Thanks Zax  ….  Double thumbs up from me …… nice to see some spirit involved ...

@frugal.rock will be encouraged I'm sure


----------



## barney (18 January 2020)

Zaxon said:


> This is everyone's prediction extending that chart:
> 
> View attachment 99792




Lol ... I suspect you know how to drive Excel way better than this old dude @Zaxon   (is that Excel??)

Thanks for getting involved ... appreciated


----------



## Zaxon (18 January 2020)

barney said:


> Lol ... I suspect you know how to drive Excel way better than this old dude @Zaxon   (is that Excel??)
> 
> Thanks for getting involved ... appreciated



Yes, excel, with a bit of superimposition.


----------



## barney (18 January 2020)

Zaxon said:


> Yes, excel, with a bit of superimposition.




Ah yes ..the old "superimposition" trick ...... whatever that is lol


----------



## aus_trader (18 January 2020)

Nice forward projection Zaxon. I think you are right in the middle of the pack with a couple of other members while the outliers lie well above and below. Interesting...


----------



## Zaxon (19 January 2020)

aus_trader said:


> Nice forward projection Zaxon. I think you are right in the middle of the pack with a couple of other members while the outliers lie well above and below. Interesting...



You too.  Hopefully, one of us "centralists" will win.  lol.


----------



## frugal.rock (19 January 2020)

Afterpay and Z1P on ABC news yesterday. 
Obviously good for business.
Does ASIC really want to curtail the BNPL industry? Me thinks not, the code of practice will come in sooner or later.
The consumer groups make no comparisons to credit cards, wonder why? It's much easier to get into bad debt via credit cards, but let's not mention banks generally charge $20 for every $1000 cash advanced for the priveledge, then typically charge
over 20% interest also...
Stop press, new offer received from my bank, "Increase your credit card limit"... with a disclaimer that they don't know about your financial position...

http://www.abc.net.au/news/2020-01-...d-purchases-worry-consumer-advocates/11873572


----------



## Knobby22 (19 January 2020)

Its a way of avoiding credit card debt and I would not be surprised to find that some of the critical consumer advocates get some funding from the banks.


----------



## Knobby22 (22 January 2020)

Ferret said:


> I stumped up for the 15k which would be 652 shares. My guess is I might get 50 shares.




85 - $1,955 worth, you weren't far off Ferret.
Also instant $1,000 profit at present SP.


----------



## bigdog (22 January 2020)

APT Afterpay closes Share Purchase Plan (uploaded)

Looks like I will get 85 shares!

The SPP offer was sent to approximately 40,000 eligible security holders and over 15,000 valid applications were received, representing a participation rate of 37% based on registered holdings. As the value of applications, approximately $240 million, significantly exceeded the cap of $30 million for the SPP, the  Afterpay Board has decided to exercise its discretion under the SPP terms to scale back applications to a total of approximately $33 million. 

All SPP applications will be scaled back on a pro rata basis, subject to:
• a minimum allocation of $506 worth of Afterpay shares (22 shares at $23.00 per share); and
• generally rounding up other scaled back allocations to the next multiple of five (5) Afterpay shares. 
• An application for the maximum amount of $15,000 will be allocated $1,955 worth of new shares (85 shares at $23.00 per share).

Refunds for application money where applications were scaled back will be processed on Monday 3 February 2020.


----------



## barney (29 January 2020)

Just an observation … APT making new highs …. If it follows a similar pattern there should be at least a bit more in the tank in the short term. (Don't hold)


----------



## aus_trader (30 January 2020)

I may have under-estimated the Afterpay price prediction, as I thought this type of payment was just for the big retailers such as those in shopping centers and department stores etc. I was surprised to see Afterpay offered in a small Automotive repair shop, in front of a fly-wheel of a clutch on display, see attached photo below. If it continues to win small business and expands further, I think they may be able to put a dent in the bank profits that is generated by credit cards etc.


----------



## frugal.rock (30 January 2020)

The new...?




F.Rock


----------



## sptrawler (30 January 2020)

aus_trader said:


> I may have under-estimated the Afterpay price prediction, as I thought this type of payment was just for the big retailers such as those in shopping centers and department stores etc. I was surprised to see Afterpay offered in a small Automotive repair shop, in front of a fly-wheel of a clutch on display, see attached photo below. If it continues to win small business and expands further, I think they may be able to put a dent in the bank profits that is generated by credit cards etc.
> 
> View attachment 100003



If they keep growing the way they are, I would be surprised if a bank doesnt buy them out.


----------



## aus_trader (30 January 2020)

sptrawler said:


> If they keep growing the way they are, I would be surprised if a bank doesnt buy them out.




Now that Z1P and APT are both large caps it wouldn't be easy to come up with the money for the purchases. The small cap days are clearly over for both as they are multi-billion dollar big caps now.

But since there is an actual disruptive business against the banks (not just pure speculative hype that usually happens with the "Next Tech Stock"), I would still consider them as growth stocks.


----------



## Knobby22 (31 January 2020)

Picked it again for February (despite looking like coming second in the comp this month).
I think the price has been held down by factors and will continue rising this coming month.
Preliminary report should be good. 
Also the virus effect should be minor.


----------



## bigdog (31 January 2020)

Hit all time high today of $38.62







ASX announcment today
31/01/2020 10:35:50 AM   *Change of Director's Interest Notice (SPP) x4
*
Four APT Directors all got their 85 shares at $23 (they really needed the extra 85 shares!!)
Elana Rubin






Anthony Eisen





Nicholas Molnar





Clifford Rosenberg

I hold and also got my 85 shares this week

226


----------



## bigdog (4 February 2020)

Just announced





Details regarding 1HY2020 Financial Results

Afterpay Limited (Afterpay) will release its Financial Results for the six‐month period ended 31 December
2019 on Thursday 27 February 2020.

An investor briefing will be held via a live audio webcast at 10.30am (Melbourne time) on Thursday 27
February 2020.

The webcast will be accessible via a link on the Afterpay website www.afterpaytouch.com a week prior to
results.

For those wishing to ask questions during the investor briefing please email marie.festa@afterpay.com
for further details.


----------



## bigdog (4 February 2020)

*Today is all time high of $39.39*

News is recent days per Financial Review

https://www.afr.com/companies/retail/afterpay-drives-booktopia-uni-textbook-sales-20200131-p53wjv

*Afterpay drives Booktopia uni textbook sales*
*Simon Evans*Senior Reporter
Feb 3, 2020 — 12.00am

Booktopia chief executive Tony Nash says vast numbers of university students are using Afterpay's buy now, pay later service, helping drive the online retailer to become the No. 1 player in academic textbook sales.

Mr Nash said the arrival of Afterpay and similar services had delivered a ''sweet spot'' for university students who wanted to stretch out the payment schedules for textbooks as they worked part-time jobs in the hospitality industry or elsewhere.

"It's been just in the right sweet spot,'' he said.

Booktopia will expand its business through the purchase of The Co-op Bookshop, which plunged into administration last year. After striking a deal on Thursday with administrators PwC, Booktopia has already shifted the back end of The Co-op's websites into Booktopia's supply chain.

Mr Nash declined to say how much Booktopia had paid for the business. "I'm not at liberty to disclose that,'' he said on Friday.

Booktopia, which expects to generate revenue of $175 million in calendar 2020, won't have any physical stores operating under the Co-op banner on university campuses in Australia. The Co-op had 34 stores on university campuses last year.

Mr Nash said it may keep open a physical store in the Sydney CBD on Phillip Street which had a solid customer base in the legal and finance sectors.

A decision on that store's future would be made in about four weeks. "There's no rush,'' Mr Nash said.

Mr Nash said Booktopia was already the top retailer of higher education academic textbooks in Australia prior to the purchase of the Co-op business.

Most university students still wanted a physical textbook in their hands rather than an e-book, but had grown up in the digital age and spurned lining up outside bricks and mortar stores to buy their textbooks like the previous generation had done.







401


----------



## bigdog (6 February 2020)

https://www.ig.com/au/news-and-trad...analysts-continue-to-rate-the-stock-a--200205

Local broker Bell Potter continues to be the most bullish on the company’s prospects, rating it a ‘Buy’ and hitting the stock with a price target of $49.35 per share.

I tipped year end price of $60 for APT


----------



## Dona Ferentes (10 February 2020)

Definitely a sector that splits opinions. Personally, if I see AfterPay or its ilk being pushed by a retailer, I'd ask for a 10% discount on 'any advertised price' as they say (not the RRP construct, either). Half for what the merchant is giving away to APT and the same again for them thinking I'm a mug.

Saw this somewhere:







> Critics argue the business model's big weakness is that the 3.8 per cent fee it charges merchants will have to come down as the number of competitors offering cheaper fees grows.
> 
> In other words, Afterpay's business model has a narrow moat, because there's no complex technology, intellectual property or monopolistic market position to stop retailers or shoppers using alternatives.





> The competitor roll call is growing all the time, with Zip Pay, Humm, Sezzle, Splitit, Openpay, Brighte and CreditLine all offering similar services – often at the same online checkout points of retailers.
> 
> Perhaps a more serious competitive threat is the launch last month of Europe's largest payments and buy now, pay later player, Klarna, in Afterpay's home market of Australia.



 and the 500kg gorilla usually wins.


----------



## bigdog (20 February 2020)

ASX Announcement  4 February 2020  Details regarding 1HY2020 Financial Results

Afterpay Limited (Afterpay) will release its Financial Results for the six‐month period ended 31 December
2019 on Thursday 27 February 2020.

An investor briefing will be held via a live audio webcast at 10.30am (Melbourne time) on Thursday 27
February 2020.

The webcast will be accessible via a link on the Afterpay website *www.afterpaytouch.com *a week prior to results.

For those wishing to ask questions during the investor briefing please email marie.festa@afterpay.com
for further details.

Authorised by:
Anthony Eisen
CEO & Managing Director


----------



## frugal.rock (20 February 2020)

Dona Ferentes said:


> ...Half for what the merchant is giving away to APT and the same again for them thinking I'm a mug



Wish I was telepathic...
So about the merchant thinking your a mug, is this a common occurrence?
What about online purchases, can you read the AI bots thoughts?
Does scowling work online as well? 
All very interesting.
Merchants need to make a living also, not to mention pay employees.


F.Rock


----------



## fergee (21 February 2020)

Dona Ferentes said:


> Definitely a sector that splits opinions. Personally, if I see AfterPay or its ilk being pushed by a retailer, I'd ask for a 10% discount on 'any advertised price' as they say (not the RRP construct, either). Half for what the merchant is giving away to APT and the same again for them thinking I'm a mug.
> 
> Saw this somewhere: and the 500kg gorilla usually wins.



Seriously this post deserves a prize! Great call @Dona Ferentes 
I cant get into the mind set of using APT or its ilk its just more debt it's not what people need right now. I prefer people owing me money not owing it to other people!


----------



## sptrawler (21 February 2020)

fergee said:


> Seriously this post deserves a prize! Great call @Dona Ferentes
> I cant get into the mind set of using APT or its ilk its just more debt it's not what people need right now. I prefer people owing me money not owing it to other people!



I agree, the problem I have with it is, it is just like layby except with layby you can go home and think about it and decide it was an impulsive buy and walk away, lose the $2 deposit.
With afterpay, you take it with you so there is no cooling off period, mugs game that will be shut down, when all the mugs get on 60 minutes IMO.
I could be wrong, and I've lost a lot of money not getting on board, but Australia has a habit of protecting the mug and punishing the supplier of the money.
Just look at the Banking Royal commission, it was the Banks fault for lending money to the dopes that provided dud information to get it.
The dope wasn't done for presenting fraudulent information.
Just my opinion.


----------



## Dona Ferentes (21 February 2020)

frugal.rock said:


> Wish I was telepathic...
> So about the merchant thinking your a mug, is this a common occurrence?
> What about online purchases, can you read the AI bots thoughts?
> Does scowling work online as well?
> ...



I have no problem with a provider of services or goods making a profit. In fact I'd prefer that to be the case. They'll be there next time if I wish to utilise them. I just don't like subsidising others' indulgences


----------



## sptrawler (21 February 2020)

Dona Ferentes said:


> I have no problem with a provider of services or goods making a profit. In fact I'd prefer that to be the case. They'll be there next time if I wish to utilise them. I just don't like subsidising others' indulgences



You are spot on Dona IMO, the problem with afterpay, someone hastopay when it backs up.
With a credit card the risk was factored into the interest rates, they were becoming unatractive and young people were changing over to debit cards, afterpay has moved them back to the buy now pay later model.
The difference is no one is factoring in the losses IMO.
In reality, the interest free period on credit cards was a buy now pay later no cost, then that was maxed out.
All that has happened is it is a credit card by a different name. IMO
I think it will be spanked hard, sooner or later.


----------



## aus_trader (21 February 2020)

sptrawler said:


> All that has happened is it is a credit card by a different name. IMO
> I think it will be spanked hard, sooner or later.




Not an expert on the different Buy-Now-Pay-Later products. But with regards to the interest and fees you have to pay on credit cards if you miss the no-interest period, Afterpay may be favoured by those that have been burnt by credit cards and harassed by debt collectors.


----------



## fergee (21 February 2020)

sptrawler said:


> I agree, the problem I have with it is, it is just like layby except with layby you can go home and think about it and decide it was an impulsive buy and walk away, lose the $2 deposit.
> With afterpay, you take it with you so there is no cooling off period, mugs game that will be shut down, when all the mugs get on 60 minutes IMO.
> I could be wrong, and I've lost a lot of money not getting on board, but Australia has a habit of protecting the mug and punishing the supplier of the money.
> Just look at the Banking Royal commission, it was the Banks fault for lending money to the dopes that provided dud information to get it.
> ...



Exactly @sptrawler  I remember buying my first surfboard on laybuy this is nothing new just an old idea digitised. It is a perfect system to take advantage of the me/now generations impulsivity but I cant see how extreme high private debt levels and a cooling in retail spending can be net positive for this. Yes I know they are expanding their customer base overseas but most western nations have the same high consumer debt problem. This is another momentum play in my opinion once the trend breaks this will be brought back to reality valuation wise in a flash.


----------



## sptrawler (21 February 2020)

aus_trader said:


> Not an expert on the different Buy-Now-Pay-Later products. But with regards to the interest and fees you have to pay on credit cards if you miss the no-interest period, Afterpay may be favoured by those that have been burnt by credit cards and harassed by debt collectors.



Wont the same happen with afterpay, when people can't pay it off?


----------



## aus_trader (21 February 2020)

sptrawler said:


> Wont the same happen with afterpay, when people can't pay it off?




No as far as I could tell and Knobby22 made a comment with similar observation earlier.

Afterpay will stop the customer from further purchases as soon as they miss a payment. There is no interest on interest and outstanding debt and allowing the customer to continue to purchase and go deeper and deeper into debt spiral, which is the case with Credit Cards.

Another big difference is, there is no 19%+ interest charged from customers as with Credit Cards. Banks are still doing this (19%+ !!) in a near 0% interest rate environment and getting away with it despite all the Royal Commission mumbo jumbo. With a whole lot of lending products like Afterpay and it's competitors coming to the market, I wonder how long the oink's can keep squeezing the Cash Cow udders (@above19%pa) of the indebted population.


----------



## fergee (21 February 2020)

aus_trader said:


> No as far as I could tell and Knobby22 made a comment with similar observation earlier.
> 
> Afterpay will stop the customer from further purchases as soon as they miss a payment. There is no interest on interest and outstanding debt and allowing the customer to continue to purchase and go deeper and deeper into debt spiral, which is the case with Credit Cards.
> 
> Another big difference is, there is no 19%+ interest charged from customers as with Credit Cards. Banks are still doing this (19%+ !!) in a near 0% interest rate environment and getting away with it despite all the Royal Commission mumbo jumbo. With a whole lot of lending products like Afterpay and it's competitors coming to the market, I wonder how long the oink's can keep squeezing the Cash Cow udders (@above19%pa) of the indebted population.




So once customers miss a payment they get barred from using the platform. With credit cards you get exorbitant interest added but you are only barred until your debt is paid off then once cleared you can keep using the facility therefore customer retention is higher in that regards compared to APT.

Im unsure on the process APT uses once a customer defaults as to how they can gain access to the platform again so that could be interesting. I believe customer retention for APT is currently very good but that could change, that and the default rate would be the obvious metrics to monitor.

Just my


----------



## Knobby22 (21 February 2020)

fergee said:


> So once customers miss a payment they get barred from using the platform. With credit cards you get exorbitant interest added but you are only barred until your debt is paid off then once cleared you can keep using the facility therefore customer retention is higher in that regards compared to APT.
> 
> Im unsure on the process APT uses once a customer defaults as to how they can gain access to the platform again so that could be interesting. I believe customer retention for APT is currently very good but that could change, that and the default rate would be the obvious metrics to monitor.
> 
> Just my




As others have said, you should think of it more as a laybuy system rather than a credit card.

It's easier for the shop keeper. Those people who get all annoyed about it should think what layby costs the merchant.

And having our youth avoiding credit cards and the grasping banks is a good thing.

The default rate is an obvious metric to monitor. The longer Afterpay is in a market, the more the default rate drops as the bad users are winnowed from the system. If you miss your payment you get blocked. Once you pay it you can be back but you won't get your limit raised for a while. If you keep missing payments you will be banned.


----------



## fergee (21 February 2020)

Knobby22 said:


> As others have said, you should think of it more as a laybuy system rather than a credit card.
> 
> It's easier for the shop keeper. Those people who get all annoyed about it should think what layby costs the merchant.
> 
> ...




I totally understand it is a type of lay buy system where you can take the goods on the day as opposed to a traditional lay buy where you have to pay off the total amount before taking possession of the item.

And I agree it is better than using a credit card or O/D.

It is still a form of credit and it still encourages spending beyond ones means as opposed to saving up and then purchasing.

@Knobby22 Good info on the process for non payments, cheers 

I actually think APT is a great business but IMO it is currently over valued especially in this retail climate..... in saying that it is on my " stocks to buy in a crash watch list"


----------



## Knobby22 (21 February 2020)

fergee said:


> I totally understand it is a type of lay buy system where you can take the goods on the day as opposed to a traditional lay buy where you have to pay off the total amount before taking possession of the item.
> 
> And I agree it is better than using a credit card or O/D.
> 
> ...




Valuation is a judgement call.

The metric that is most important for the valuation is growth, especially internationally. If that slows then it is overvalued. If it is stellar it may be undervalued.
The next report will be very interesting.


----------



## fergee (21 February 2020)

Knobby22 said:


> Valuation is a judgement call.
> 
> The metric that is most important for the valuation is growth, especially internationally. If that slows then it is overvalued. If it is stellar it may be undervalued.
> The next report will be very interesting.



Aye mate valuation is like beauty "in the eye of the beholder"


----------



## frugal.rock (21 February 2020)

Dona Ferentes said:


> I have no problem with a provider of services or goods making a profit. In fact I'd prefer that to be the case. They'll be there next time if I wish to utilise them. I just don't like subsidising others' indulgences



Sorry Dona, I wasn't being nice yesterday posting that.... don't know why I did that.
Crickets chirp...

For the retailer, it's another POS payment method. 
Yes, they get charged fees. 
Don't quote me on this, but I think many retailers are happy to have the extra payment method because of the extra business it brings, which offsets the fees, and them some.

Credit, lay buy... debt, call it what you will.
It's an alternative, to every other product out there. 
It's right for some, not others.
Pretty sure the right for some, is the younger generation.
Look mum, my first debt system...
and anything up to maybe 30yr olds?

Young people don't stay young, population growth...if the BNPL product models stick, and manage to keep appealing to the young'uns,
it's going to be like them... growing, year by year, a few ups and downs to be expected.
The take-up of BNPL systems world-wide, is increasing. What can you do? It's a happining thing.

If it's just another payment method, yes, I would haggle as well, just depends on the shop.
Always have to have a haggle at Hardly Normal, Gerry probably factors it in to his prices...

F.Rock


----------



## bigdog (27 February 2020)

*
ASX announcements today*





*"Half Year Results Commentary"* (uploaded below)

Results highlights for the half year ended 31 December 2019 (NZ$)1,2,3
• Total revenue of $806.7 million, an increase of 31.6%
• EBITDA4 of $263.2 million, an increase of 20.5%
• Net profit after tax of $184.9 million, an increase of 21.1%
• Basic earnings per share (EPS) of 25.15 cents, an increase of 20.6%
• EBITDA to sales margin of 32.6%, better than expected
• Operating cash flow of $160.6 million and a closing cash balance of $618.4 million
• Marketing investment of $84.1 million targeting opportunities in China and the USA
• Group infant nutrition revenue of $659.2 million, up 33.1%
• Strong growth in China label infant nutrition, with sales doubling to $146.7 million and distribution expanded to 18,300 stores
• USA milk revenue more than doubled and distribution expanded to 17,500 stores

*Outlook FY20*
Mr Eisen appears confident the company is well-positioned to exceed its medium term growth targets.

He said: “We are now focused on exceeding our mid-term underlying sales target of over $20b by FY22 and we are aiming to reach 9.5 million active customers by the end of this financial year.”

Though, this will come at a cost. He explained: “While this will impact Group profitability in the short term, we expect to achieve higher profitability in each market as they mature over time, in-line with our ANZ experience.”

“We believe we have the right strategy, the right people and the right business model to continue our momentum and deliver long term value for our shareholders,” he concluded.

Given the COVID-19 situation, A2M are assessing the level of discretionary marketing investment and trade marketing activation that can be effectively deployed in China for the remainder of the fiscal year.

580


----------



## fergee (27 February 2020)

bigdog said:


> View attachment 100787
> 
> 
> *
> ...



Hey @bigdog love what you do man and really appreciate it but I think we have half APT half A2M posted above?


----------



## bigdog (27 February 2020)

Share price now up 2.36%







SP two minutes ago Share price was up 1.47%


----------



## barney (27 February 2020)

bigdog said:


> Share price now up 2.36%




Currently up 3% today …. 

I'm no fundamentalist, and I know the Company is positioning itself for growth …. but …. 

Given they turned over almost $5 billion in the Half Year, and still lost $31 million … and ...

Their Balance sheet is predominantly made up of recent Cap Raising efforts.

Is there any cause for concern that they are biting off too much too quickly?


----------



## Knobby22 (27 February 2020)

Nope
Their customers and merchants are increasing greatly, this cost money to sign up, set up the systems etc.
Their losses are reducing. They are now profitable in Australia. The US customers are now more than the ANZ customers. All metrics are improving.
Once they stabilise the profits will be large but first they need to grow for a couple more years.

Very happy.


----------



## sptrawler (27 February 2020)

barney said:


> Currently up 3% today ….
> 
> I'm no fundamentalist, and I know the Company is positioning itself for growth …. but ….
> 
> ...



Given that they turned over $5 billion and what is their take 3%?, how come the loss, I'm not following them but that seems like a lot of income for a loss.
Especially when you consider they are an online platform.


----------



## barney (27 February 2020)

Knobby22 said:


> Very happy.




I hope you're right Knobby ….  

They have certainly had no trouble getting heavy hitters to 'loan' them lots of cash which is a big vote of confidence.

On the flip side, with a $9.5 billion market cap they have some catching up to do when they do become cashflow positive.

Too scary for me … I'll stick to my $4 million micro Specs where its safe


----------



## fergee (28 February 2020)

APT's long term trend still seems to be intact.

It is still trading in the trend channel and hasn't broken through its weekly 55ma.

IMO it looks like there could be a support level around the $28 region if this breaks the low $20's could well be on the cards.

This is one of the stocks on my crash watch list to buy for the long term, once I feel there is good value for me in it.


----------



## Ferret (16 March 2020)

2 months since the SPP and APT now cheaper than the SPP price.  Amazing how things can turn.  
And now that they are at these prices I don't want them! Well, not yet.

I always wondered how the business model would go in a recession.  I guess we'll find out over the next six months.


----------



## Knobby22 (16 March 2020)

Yes, I sold mine 3 weeks ago with most shares.
My concern is that if we enter a severe recession/depression then no one will buy anything so Afterpay sales will go through the floor. My second concern is that we enter a new  Depression.


----------



## Ferret (16 March 2020)

Knobby22 said:


> Yes, I sold mine 3 weeks ago with most shares.



Well done Knobby.  You're a better investor than I am!


----------



## barney (16 March 2020)

Knobby22 said:


> Yes, I sold mine 3 weeks ago




Well done Knobby ….. Great to be able to look at something in hind sight and know you made an excellent decision in real time


----------



## aus_trader (17 March 2020)

Funny that Guys, Knobby was still cheering on the APT story on the 27th of this month as can be seen from the earlier comments while he sold out ha ?


Knobby22 said:


> Nope
> Their customers and merchants are increasing greatly, this cost money to sign up, set up the systems etc.
> Their losses are reducing. They are now profitable in Australia. The US customers are now more than the ANZ customers. All metrics are improving.
> Once they stabilise the profits will be large but first they need to grow for a couple more years.
> ...


----------



## Knobby22 (17 March 2020)

aus_trader said:


> Funny that Guys, Knobby was still cheering on the APT story on the 27th of this month as can be seen from the earlier comments while he sold out ha ?




Yea, fair call.
It was one of the last, must have waited for announcement. Apologies I didn't post my sell next day after saying good things about the company.

Upload contract.


----------



## aus_trader (17 March 2020)

Knobby22 said:


> Yea, fair call.
> It was one of the last, must have waited for announcement. Apologies I didn't post my sell next day after saying good things about the company.
> 
> Upload contract.



All good Knobby22, it wasn't meant to specifically target you. Apologies if it came across as such, it's just that posters say they bought at the bottom or sold out near the top without proof.

Not to mention, some fundies (the cheating ones) keep on "Buy", "Undervalued", "Accumulate" ratings and get journalists to publish highly bullish stories about specific companies to get us, the poor retail suckers to put on the bids while they smartly sell out of their positions to us and book in profits.


----------



## Knobby22 (17 March 2020)

I feel a bit bad though, not posting I sold them.
I sort of sold nearly everything over 3 days. (Couldn't do it over one day- (too thick) - and then just stopped posting on shares and just commented on the Coronus financial implications thread where I joined qldfrog as an absolute bear.


----------



## bigdog (17 March 2020)

ASX announcement today 
17/03/2020 9:02:19 AM   *US Regulatory Settlement*


----------



## frugal.rock (17 March 2020)

Knobby22 said:


> I feel a bit bad though, not posting I sold them.
> I sort of sold nearly everything over 3 days.



Ok, that's fine, not sure what to do with these 200 Afterpay shares I bought at 32.99....
New 52 week low hit again today...
$ 17.89  strange days...

All good Knobby. Don't think there's any responsibility on your part, it's nice to know that you consider others.... (when the price is halved )

F.Rock


----------



## Smurf1976 (18 March 2020)

I wonder how this company will go with regard to bad debts?

With the economic situation turning as drastically and suddenly as it has, there's going to be a lot of people struggling to meet their obligations and I'd think that those most affected, hospitality etc workers who are typically younger people, would be Afterpay's primary demographic?


----------



## aus_trader (18 March 2020)

Smurf1976 said:


> I wonder how this company will go with regard to bad debts?
> 
> With the economic situation turning as drastically and suddenly as it has, there's going to be a lot of people struggling to meet their obligations and I'd think that those most affected, hospitality etc workers who are typically younger people, would be Afterpay's primary demographic?



Yes I think lay-by re-payments will come last in the scheme of things. Food, medicine, petrol, bills (to make sure power, gas and water doesn't get cut off) would take immediate attention I think.


----------



## So_Cynical (18 March 2020)

APT 15 bucks OMG.

Cash burn and retail exposure is poison in the VFC.

EDIT: 5 minutes later its 14.


----------



## Dona Ferentes (18 March 2020)

Sell now; buy later

down 33% today  ... and a low of $11.92







> lunchtime on Wednesday, with the company valued around $4bn, Afterpay co-founders Nick Molnar and Anthony Eisen posted a message to social media acknowledging the dire conditions facing its retail partners.





> “Now more than ever we stand together with the businesses that are essential to the fabric of our Afterpay community. That’s why it’s important that Afterpay Day, our biannual shopping event, still goes ahead later this week,” the pair said.





> “The last few days have been crazy for us all and we know there is still uncertainty ahead. We’re continuing to keep a close eye on development and work through ways we can offer support.”


----------



## sptrawler (18 March 2020)

Who wears the cost if people don't make the full payments?
Given they made a loss in the last report, posted by Barney on 27 Feb and that included an impairment of $47million, I would hate to see their next report.
I haven't followed them, only read Barney's post on 27/02, I don't hold.
Just my opinion.


----------



## aus_trader (19 March 2020)

sptrawler said:


> Who wears the cost if people don't make the full payments?
> Given they made a loss in the last report, posted by Barney on 27 Feb and that included an impairment of $47million, I would hate to see their next report.
> I haven't followed them, only read Barney's post on 27/02, I don't hold.
> Just my opinion.



Yes mate, @barney warned us even before all the share price decline happened, while APT was still a market darling. Well done Barnz with your company analysis, hope you saved APT holders a few cents


----------



## bigdog (19 March 2020)

ASX announcement today
19/03/2020 9:02:43 AM    *Letter to Shareholders *(4 pages uploaded below)





















780


----------



## barney (21 March 2020)

aus_trader said:


> Yes mate, barney warned us even before all the share price decline happened, while APT was still a market darling.




I'll call the timing a bit lucky Aus but it does show the recent rises had a lot of optimism factored in

Been crook for a couple of days but I see it bottomed at under $10 on Thursday  ..... Recovery yesterday was equally as volatile on big Volume.  

Probably a few more swings over the short term given the state of the world.


----------



## fergee (25 March 2020)

I am very interested to have a look see at the retention and default numbers for this period. It will give a good indication of how robust their current model is. Also the bounce back in new customers afterwards may surprise on this as a lot of consumers will be looking to tap credit even more so than in a long time imo.


----------



## PZ99 (25 March 2020)

Afterpay will probably get a speeding ticket by the end of today


----------



## barney (26 March 2020)

Mitsubishi Financial and Morgan Stanley buying up big the last few days …… A lot of punters were no doubt relieved of their Stock 

Definitely not the time to buy now after 100% increase from the lows in 3 days (imo) 

If it happens to fill that gap and re-test $11 however, the risk has been substantially reduced


----------



## frugal.rock (26 March 2020)

PZ99 said:


> Afterpay will probably get a speeding ticket by the end of today



And today...
It's the high frequency traders that need the speeding ticket...
Unlikely that the ASX would pick APT out of the barrel of hundreds!
Would have to be a (un) lucky dip at the moment to get a "please explain"...

F.Rock


----------



## shash (16 April 2020)

BACKGROUND:

APT is a BNPL company founded to target the, credit card and debt shy, millennial’s. It has introduced a new payment vertical for consumers to achieve credit-card like consumption outcomes without the negatives associated with excessive debt. It’s a relatively new company expanding at a rapid pace across NAM & Australia.



THESIS:  

The investment thesis for APT is long term industry growth for BNPL as a payment vertical as the number of millennial’s grow and their spending power grows. The business model is a cross between a lay-by system where customers used to pay in installments and then pick up their good once payments had been completed and credit cards/short term loans which allowed consumers to consume now and pay over time.

Total card usage has been rising in a digitized world, however, in this trend, the growth in debit card usage has far outstripped the growth in credit card usage in Australia. This demonstrates the millennial’s aversion to debt/credit-cards or interest based loans.





APT’s core competitive advantage for the consumer is an easy to use payment/budgeting tool that allows immediate consumption. The app is easy to use and doesn’t require the company to do background credit checks leading to a faster approval time (approximately 2-5 seconds for an existing user). There are no fees payable by the consumer to use the app and late fees are fixed at $7 per week and a maximum total of $68 in total late fees due.

APT generally offers their platform to a merchant who pay APT a % of the products sold through their offering. This ranges from 3-7% of the product value. APT pays the merchant who in turn sells the good/service to APTs customers. Currently, merchants are not allowed to pass on this cost to their customers according to their agreements. APT’s competitive advantage for the merchant is 3 fold:


Increase in the average order size per customer
Increase in the number of customers/leads to the store/website
Analytics for their products and easy on-boarding
APT’s target market started with females ages between 16-40 and their spending into the online fashion market, however, this has expanded to include all millennial’s discretionary spending. New verticals are still being identified such as healthcare treatments. Their current market they operate in are:


ANZ – Dominant player with first mover advantage. Online sales $29bn AUD
US – New entry with first mover advantage, still scaling. Very large online market $514bn USD
UK – Second entrant, still scaling. Online market £96bn
Canada – Will enter in 2020/2021. Online sales $25bn USD
Additional markets are available for APT to enter but this will depend on their merchants desire to enter new markets.

Financially speaking, APT runs a loan book with a tech angle to attract customers. This means the risks for APT are similar to that of a loan book:


Loss rates & provisioning
Availability of funding
Balance sheet leverage
The core financial competitive advantage for APT is their ability to generate higher sales from a fixed loan facility. APT pays a fixed annual interest rate fee for their loan facility which is secured against their receivables and generates income through transactions by customers on which they make a fixed percentage of sales (3-7% paid by the merchants). Their receivables are very short dated (<30 days) but their costs are fixed on an annual basis, this means if they are able to increase the number of transactions on their fixed loan facility, they generate higher income per $ of loan capital they draw thereby increasing their ROIC. This is also supported by the fact that the number of transactions per customer per annum increase the longer a customer is with APT.

Valuation will be a challenge at present as the business is being run on a cash neutral basis. A view will be taken on the profitability of the business when the hyper expansion mode finishes. Key drivers will be NTM & EBITDA margins over the medium term as well as the view on what cash flows and loss rates look like through a cycle.



VARIANT PERCEPTION: 

The market is currently caught up in the COVID panic and is focusing on the short term loss rates expected to arise from APTs loan book. The bull thesis is that the loan book is a self cleaning mechanism which eliminates weak customers and retains loyal customers who are more likely to stick to their payment obligations. The bear thesis is that the model hasn’t been tested through a cycle, especially one which has come to an end so abruptly.

TARGET PRICE:  

$33.5

Assumptions:


NTM – 2%
EBITDA – 5%
Able to capture 39% of addressable market in NAM, ANZ & UK
6% loss provisions (in terms of loan book)
Av transaction size $175
Book turn of 11.4
APT is undervalued due to:

Read rest of the blog post on: https://banksiafinance.wordpress.com/2020/04/12/afterpay-a-new-way-to-pay/


----------



## MrChow (4 May 2020)

APT looks to me like an all or nothing business.

Either it'll collapse on itself from bad debt margin > income margin and then struggle to raise more debt to forward to merchants for their customer receivables.

Or it'll continue to grow exponentially and manage to get the balance right and earn a percentage of an astronomical figure in the future.

If they can survive this coronavirus era you'd have to think their business model is pretty solid.


----------



## martaart077 (7 May 2020)

Reading u post just made me think of a pyramid scheme.


----------



## qldfrog (8 May 2020)

ASIC warning about newbie day trading like mad, and articles specifically naming Afterpay as being widely used by these inexperienced traders. 
a recipe for disaster for them but could be good source of win for more experienced punters
Worth taking the fact into account with this share


----------



## Dona Ferentes (17 May 2020)

so much for the thinking that APT is a flash in the pan. Its rebound from the GCC has been consistent, and APT reached a record high last week.

But this may not be for the old reasons. Now *tencent *is onboard with a 10% stake, acquired recently, the thesis for growth has morphed into a 'global payments systems' play, much more than the 'transaction clip' story.


----------



## Dona Ferentes (17 May 2020)

Fully digital, own the customer .... parallel banking systems? usurp Mastercard and Visa? Superpower rivalry?


> The move onto Afterpay's register .... was in part a response by Tencent to Ant Financial, a key competitor, which recently bought a minority position in Klarna, a European buy now, pay later giant and one of Afterpay’s main competitors in the US. But both deals reflect the China fintech giants' desire to play a bigger role in the global payments system, where revenues are expected to hit $3 trillion by 2025, according to McKinsey.





> As the US incumbents fret about the arrival of *buy now, pay later* into the world's biggest retailing market, Tencent this week revealed just how closely its approach aligns with that of Afterpay. This goes far beyond facilitating payments; rather, both companies are keen to use data to fuel deeper relationships with retailers.
> 
> [An analyst] detailed how online retail sales would be higher in the post-COVID-19 economy, which would force shops and brands in China to invest more in direct links with their customers. "We want to help a lot of brands and retailers establish an online presence which they own and control, to get directly connected to their users and to acquire new users online," he said. "That is the reason we are building up a lot of tools to facilitate that."
> 
> This is precisely how Afterpay thinks. While most outsiders consider it as simply an instalment payments product, inside Afterpay it's always been about building a platform to connect merchants and customers, and feeding back to retailers insights using the data generated to help them make more sales. At the same time, the data helps Afterpay learn more about credit risk.




*Farewell to cash*


> Tencent and its big Chinese payments competitor Ant Financial, which is part of the Alibaba group, have a 90 per cent stranglehold on mobile payments in China and have largely eliminated cash from its economy in just five years. As Citi has described it, the companies are creating "parallel banking systems". By allowing customers to pay in stores by taking photos of QR codes with their smartphones through their WeChat Pay or Alipay apps, China has leapfrogged plastic card payments pioneered in the West five decades ago. And having saturated their local markets, both companies have been looking to expand abroad. This has primarily been to support Chinese consumers but also to create a beachhead in the global payments sector dominated by the United States. Their overtures have not always been welcomed.
> 
> Ant Financial, for example, faced a roadblock in 2018, when regulator the Committee on Foreign Investment in the United States (Cfius) blocked its proposed $US1.2 billion acquisition of US payments company MoneyGram on national security concerns. Two weeks ago, US Republican Senator Ted Cruz tabled legislation to ban federal employees from conducting official business over platforms run by Tencent, Huawei and other Chinese companies deemed too close to the state.
> 
> ...





> With Afterpay and Tencent both talking up the strategic stake as the start of a deeper partnership, *Afterpay investors realise the retail data it generates could become its most important asset*, especially if it keeps growing in the US market.
> 
> Andrew Mitchell, a senior portfolio manager at Ophir Asset Management, which owns Afterpay shares, says the Tencent equity purchase is a "massive tick of approval" for the sector, but the key unanswered question is where Tencent sees the most value in Afterpay. "Is it its data on its Millennial consumers? The value it could bring global brands that use Tencent's payment platforms? Or is it to broaden its reach into other geographies, like the US and UK, that Afterpay is rapidly growing a foothold in? "It’s likely a combination of all three," he says.
> 
> ...





> *Additional services*
> Afterpay may also be influenced by Tencent's thinking on adding additional financial services to its payments offering. It made a new executive hire this week, bringing in Lee Hatton, formerly the CEO of National Australia Bank's digital bank known as UBank, in an unknown role. If it became a "stored-value facility", under regulations currently under review by the Reserve Bank, Afterpay could hold customer funds, allowing its instalment service to operate with less reliance on the existing payments system, which is currently accessed four times for each transaction, adding to costs.
> 
> Blockley is sceptical that in-person smartphone payments will catch up any time soon with the massive volumes seen by traditional debit and credit card networks in Australia and the United States. But he says it is inevitable that payments using mobile phones and wearables will rise.
> ...



something for everyone.

(_lot of ifs to get to the 2030 'nirvana'_)


----------



## Dona Ferentes (3 June 2020)

Came across this







> No Australian company – and few globally – are acquiring new customers at the rate of Afterpay. It is approaching nine million active users



So it's how they retain them; the profile would have a range of profitable through to one-offs.


----------



## barney (2 July 2020)

APT continues to defy gravity ... +8 bagger since late March  Spec stock behaviour.

Fundamentally I still don't understand the strength of the rise. To my eyes it looks like a lot of future profits are already locked into the share price but what do I know.  If @bigdog and others are still riding the wave, I'd suggest it's your shout


----------



## Dona Ferentes (7 July 2020)

Trading Update, Capital Raising (Insto $650mill + SPP of $150mill) and Co-founder sell down

Hmmm.

A lot to digest

Underlying sales of $11.1b in FY20, more than doubling the prior corresponding period (up 112%).
● Underlying sales in Q4 FY20 was $3.8b, 127% above Q4 FY19. 
● Q4 FY20 sales performance represented the highest quarterly performance ever, reflecting the accelerating shift to e-commerce spending since the impacts of COVID-19 emerged globally.
● Merchant revenue margins for FY20 are expected to be in line with or better than H1 FY20 and FY19.
● Net Transaction Loss (NTL) for FY20is expected to be up to 55 basis points. ANZ NTL has remained at historically low levels and NTL within the US and UK regions has improved in  2H FY20 compared to 1H FY20 as a result of improving risk performance and historically high payment recovery rates.
● Net Transaction Margin (NTM) for FY20 is expected to be approximately 2%, underpinning a pathway to longer term profitability for the overall business.


----------



## barney (7 July 2020)

Dona Ferentes said:


> and Co-founder sell down.




Mr. Eisen and Mr. Molnar cashing in 10% of their collective chips.  That's a lazy $125 million each

That means they still own 90% of their Stock. 

At today's price of $68 per share they still own over *$1.2 billion* worth of Stock ... each!

I'm not jealous ..... well maybe a little .... ok, a lot


----------



## Dona Ferentes (7 July 2020)

according to someone not enamoured with the story


----------



## galumay (7 July 2020)

Insiders selling, capital raising, nothing to see here. Someone else pointed out that this is the business model, makes a loss on customers, profits from shareholders, redistributes wealth created by shareholders to founders. 

@Dona Ferentes we don't use outdated metrics like P/E for stocks, the best formula to use is the Stonk Ratio, (Capitalisation/Number of Shares Outstanding)/Share Price=Stonk Ratio (SR) Ideally SR should be about 1.0 if you are looking to buy.


----------



## Klogg (7 July 2020)

galumay said:


> Insiders selling, capital raising, nothing to see here. Someone else pointed out that this is the business model, makes a loss on customers, profits from shareholders, redistributes wealth created by shareholders to founders.
> 
> @Dona Ferentes we don't use outdated metrics like P/E for stocks, the best formula to use is the Stonk Ratio, (Capitalisation/Number of Shares Outstanding)/Share Price=Stonk Ratio (SR) Ideally SR should be about 1.0 if you are looking to buy.




At first take, this looks ridiculously overpriced, but I'm not sure its that simple.

Consider TAM, credit risk modelling, loss ratios, etc. They're taking huge market share, have the most data on borrowers (so the superior credit risk modelling) and the best onboarding processes.

Australian operations are profitable and growing quickly. They're running a loss because the books is growing and foreign operations need investment. Granted, the numbers are very big (billions), but there's a potential here for every foreign market to be profitable.

Of course I'm not confident enough to own it, but I'm not sure its just 'overpriced'.


----------



## galumay (7 July 2020)

I don't think the consumer credit market is a sector with any real niches of competitive advantage. The excess margins will be competed away. Australia is only profitable because of default fees and the unsustainable credit charges.

I think it is ridiculously overpriced, the sort of margin, growth and scale assumptions that need to be just about infinite, sustained and exponential to allow a value anywhere near its price is beyond the power of my imagination. 

Of course in stonk world thats a contrarian take, as is any consideration of value in a traditional sense, and there is a very real possibility the price will continue to go up for long enough to make buyers at current prices look like they know what they are doing. Not a game i want to play though!


----------



## Klogg (7 July 2020)

galumay said:


> I don't think the consumer credit market is a sector with any real niches of competitive advantage. The excess margins will be competed away. Australia is only profitable because of default fees and the unsustainable credit charges.
> 
> I think it is ridiculously overpriced, the sort of margin, growth and scale assumptions that need to be just about infinite, sustained and exponential to allow a value anywhere near its price is beyond the power of my imagination.
> 
> Of course in stonk world thats a contrarian take, as is any consideration of value in a traditional sense, and there is a very real possibility the price will continue to go up for long enough to make buyers at current prices look like they know what they are doing. Not a game i want to play though!




I _think_ (that is to say, I don't know for sure) that some stonk valuations are valid in this low rate world. If you can borrow at 2% and buy a company growing from almost no earnings, but at 100% p.a., your investment quickly becomes cheap. In APT's case, Australian operations are profitable, and growing extremely quickly.

The competitive advantage that I think I see is the data-set and analytics behind their customer base. They're the largest BNPL player by far. So, they have the largest data set. Any algorithm used to assess a customer's ability to repay will be superior, as they have the biggest history to draw upon.

Also consider that:
- Customers repay within 2 months
- The retailer pays the 4% upfront (APT passes a lesser amt to the retailer)
- Customers can only buy products worth <$250 initially (in Australia)
- It takes many APT purchases before you can buy anything worth >$1000
- There is an upper total limit too, but I'm not sure what it is

Their demographic is one of high-income, low net wealth. In other words, they make big money and spend it (typically uni educated women in their late 20s/early 30s. I'm not trying to be sexist, just using APT info).
This group has stable employment (they're not contractors), so income is far more predictable than the average citizen.


The biggest risk I see is regulatory, but not anytime soon. The APT outcome is superior for the consumer, relative to credit cards. They pay no interest. Effectively, the retailer pays the interest (4% of purchase price goes to APT)



I think (without enough conviction to buy it myself), that APT will grow their user base to one larger than any other Australian company. Consider the number of potential customers they have across Aus/USA/UK. They have a potential customer base in the tens of millions - larger than the big 4 banks.

They also have superior execution to other BNPLs. Their progress compared to any other BNPL is better on almost any metric.

This has the potential to turn into Google sized returns.


----------



## galumay (8 July 2020)

I don't agree with your analysis, and its really just reflective of the spin & hype that the sell side has been pumping on this consumer credit company. Thanks for sharing your thoughts in such detail, its always good to have one's views and opinions challenged by constructive and considered responses.

My poor opinion of the business is also coloured by my intense dislike of an unethical business model that makes us all pay more to provide what looks like 'free' credit to a few. 

I will leave the discussion here, as I think I have previously sworn off this thread because its not really a productive use of my time given I would never use the lender, nor buy shares in the company!


----------



## qldfrog (8 July 2020)

galumay said:


> I don't agree with your analysis, and its really just reflective of the spin & hype that the sell side has been pumping on this consumer credit company. Thanks for sharing your thoughts in such detail, its always good to have one's views and opinions challenged by constructive and considered responses.
> 
> My poor opinion of the business is also coloured by my intense dislike of an unethical business model that makes us all pay more to provide what looks like 'free' credit to a few.
> 
> I will leave the discussion here, as I think I have previously sworn off this thread because its not really a productive use of my time given I would never use the lender, nor buy shares in the company!



Understand, difference between investor and trader.got a few apt via one system


----------



## Knobby22 (8 July 2020)

I note the owners are taking some profits which is understandable but all suggests that the shares may be fully priced. I think the model is good, but I don't know if the price adequately takes into account risks.


----------



## qldfrog (8 July 2020)

Knobby22 said:


> I note the owners are taking some profits which is understandable but all suggests that the shares may be fully priced. I think the model is good, but I don't know if the price adequately takes into account risks.



As you know with market darling, this is thrown out of the windows.could still double triple the Fed is the limit...;-)


----------



## Klogg (8 July 2020)

galumay said:


> I don't agree with your analysis, and its really just reflective of the spin & hype that the sell side has been pumping on this consumer credit company. Thanks for sharing your thoughts in such detail, its always good to have one's views and opinions challenged by constructive and considered responses.
> 
> My poor opinion of the business is also coloured by my intense dislike of an unethical business model that makes us all pay more to provide what looks like 'free' credit to a few.
> 
> I will leave the discussion here, as I think I have previously sworn off this thread because its not really a productive use of my time given I would never use the lender, nor buy shares in the company!




More than fair.

Even though I'm making the bull case, the truth is I've put this in the "I Don't Know" basket, as I don't own it.

And you're right - once we've categorised it according to our knowledge/view, we should move on.

Good chat though.


----------



## Dona Ferentes (8 July 2020)

Klogg said:


> More than fair.
> 
> Even though I'm making the bull case, the truth is I've put this in the "I Don't Know" basket, as I don't own it.



It is an interesting sector, BNPL . It has emerged so suddenly through a convergence of circumstances; 
- Covid has focused things,
- Move away from cash. *Cashless *is the NEW NORMAL
- digitisation and smart phone apps have allowed it
- the uptake by younger generations
- reaction against credit charges (much better pass 4% to merchant than cop 20% yourself)

Whether it will achieve scale remains to be seen. My hesitation has been that rational people will only spend a certain amount on what can only be thought of as unnecessary items, impulse buying. For that I think _galumay _has a point about it being unethical, preying on the weakness of consumers (mindless or not).  It has always been in the back of my mind the trajectory of growth could not be sustainable. To date, I have got that wrong. Also bringing forward consumption doesn't really achieve anything. 

Plus I would have thought the incumbents would have found a way to fight back or at least deny the new players the space to grow. That is a failure. 

Now the institutions are on board, the dynamic of "research" and the building of portfolios and index construction gives me great cause to worry about too much upside. If it was a hard one to buy earlier, it can be thought of as being even more fraught now, with new players and new agendas

My only takeout is that if I see AfterPay on offer, I have a duty to request a 5% discount (at the very least) because otherwise I am subsidising someone else's frivolity.


----------



## sptrawler (8 July 2020)

Basically the Banks were hammered for supposedly lending money to those who can't afford it, now we have an app with minimal checks, that allows people to buy something they may not be able to afford. Weird World IMO.


----------



## Klogg (8 July 2020)

Dona Ferentes said:


> It is an interesting sector, BNPL . It has emerged so suddenly through a convergence of circumstances;
> - Covid has focused things,
> - Move away from cash. *Cashless *is the NEW NORMAL
> - digitisation and smart phone apps have allowed it
> ...




"My only takeout is that if I see AfterPay on offer, I have a duty to request a 5% discount (at the very least) because otherwise I am subsidising someone else's frivolity."

Technically, it's 4% minus the cost of electronic payment (if using a debit or credit card).

Either way, you have a point. I am going to try this the next time I'm shopping at a retailer that offers Afterpay


----------



## Dona Ferentes (8 July 2020)

Klogg said:


> "My only takeout is that if I see AfterPay on offer, I have a duty to request a 5% discount (at the very least) because otherwise I am subsidising someone else's frivolity."
> 
> Technically, it's 4% minus the cost of electronic payment (if using a debit or credit card).
> 
> Either way, you have a point. I am going to try this the next time I'm shopping at a retailer that offers Afterpay



Merchant fees vary, depending on size of retailer, and was aware of it being 4%. I have  a duty to myself to get best price


----------



## Dona Ferentes (9 July 2020)

Biggest game in town. The suits are onto this one:

UBS has a price target of $27.
Morgan Stanley price target is $36.
Morgans has a $68.58 target price.
Macquarie has a price target of $70.
Bell Potter has a $81.25 price target.

_I think Mr Gumnut and his well-honed dart needs a throw._


----------



## barney (9 July 2020)

Dona Ferentes said:


> Biggest game in town. The suits are onto this one:
> UBS has a price target of $27.
> Morgan Stanley price target is $36.
> Morgans has a $68.58 target price.
> ...




I think Bell Potter have it close ... The "Suits" will need to offload their Cap Raise shares ($66) for at least 20% to the unwary punters


----------



## Knobby22 (9 July 2020)

The very reason Afterpay is successful is the rapaciousness of the credit card with its methods of charging fees to the merchant as well as extract ridiculous interest rates from the consumer.
Young consumers are weary of them as they are aware of some of their cohort falling into the trap and so don't want to have credit cards.

Afterpay essentially acts as a modern update of the old method where you buy clothing and pay it off in small payments over a few pays (laybuy).
The consumer cannot run up a lot of debt, the limits are so low.

My nieces use it so they don't get into debt.

So I disagree strongly that the company is unethical. It is far more ethical than Visa/Mastercard and companies such as Zip, Latitude and even Credit Corp with its lending product.

Also one of the reasons Afterpay is worth a lot is not its business but its access to millions of young consumers who can be difficult to reach. Imagine how much the database is worth!.


----------



## peter2 (9 July 2020)

Today's snapshot of the gainers.  Demand is strong for BNPL services.


----------



## barney (9 July 2020)

Knobby22 said:


> its access to millions of young consumers who can be difficult to reach. Imagine how much the database is worth!.




Something I hadn't thought about. Good point


----------



## Dona Ferentes (9 July 2020)

as of today, after touching $75 and closing at $73.50 a share, AfterPay is in the ASX Top 20 based on Market Capitalisation, of over $20bill


----------



## Rustyteeth (9 July 2020)

So_Cynical said:


> Afterpay and Touch have merged to become the Afterpay Touch Group, 215 million shares on issue with a MC of 669 Million, top 20 hold 65%, i imagine an investor presentation will be released in a few weeks or so, 3 directors in the top 20.



Spectacular !!


----------



## makteb (26 July 2020)

I see a lot of chat here about APT.  What are we doing about the stock other than chatting about it?

APT has had a nice run.  Cynical, i hope you don't mind but i'll like to add some options trading into this thread as a means on how to trade a stock with high IV and maybe something to learn plus a bit of flair into the conversation.  If you do, let me know and I will stop.

Been watching this stock since Feb.  Had no courage to buy in at $10 in March!
Its had a breather hitting 72 or so and showing some support at 70.  There is no indication of the next support down but with the co founders selling and buy in from some players lets assume 66 is a starting point.
Who knows what is to happen so using this run from April, and loosely (i mean very loosely as there are no other indicators what so ever) using EW, this run up to 70 is wave 1. Wave 2 will retract to some point but we don't know.  Furthermore, earnings report is late august.

Lets pretend we buy a 60 PUT Dec 20 for $9 and sell a 65 PUT Aug 20 for $5.  We need to pay for the long put, and margin is required for this position as well as a trade plan.  1 of 2 exciting events happens at expiry
1. 65 PUT expires worthless
2. we are assigned and own APT stock.  The cost of APT on assignment is $65 plus fees.
For those familiar with options, have a think on what to do for Sept options.  Remember IV is high.
There are various scenarios to consider, i'll leave that for you to consider as well.
We wait.


----------



## makteb (13 August 2020)

13/8/20   One week till August Put expiry and its looking good so far.  We have a choice, close early and remove risk or go to expiry.  Lets go to expiry according to original trade plan.

What are we thinking for Sept?  AGM is around 27th August.

Food for thought
1. as APT moves up, selling PUT will require more margin as we are long DEC 60 PUT
2. acquisitions of shares will require funds


----------



## Dona Ferentes (15 August 2020)

Afterpay is hiring an *Influencer Marketing Associate*, based in New York City, according to a filing on LinkedIn.

_"Afterpay is looking for a freelance contractor to help us maintain and grow our *influencer *network. We're looking for someone who has at least 3-6 years of experience working on influencer campaigns, and can dedicate at least 25 hours per week to this program._" This role will be a 6 month contract, the company says.

Key responsibilities include selecting monthly influencers via the company's partner influencer platform; assisting with managing the brand ambassador program; and _"ensuring activations happen in timely fashion_."

_"If you are brave, if you are committed to doing the right thing, if you always keep it real, and your background matches the description above then please apply today!,"_ the company says.

Afterpay is continuing to hire for all open roles with all interviewing and on-boarding done virtually due to COVID-19. All new team members, in addition to current staff, will temporarily work from home until it is safe to return to our offices.

-_  so, you can get to influence the choice of influencer?. The whole process sounds rather cut-throat to me. And I thought on-boarding happened at Guantanamo Bay_


----------



## Lucky777 (20 August 2020)

Apt announcement yesterday:

https://pasteboard.co/JnaYSmT.jpg

NTL improvements is a huge factor for the bears as that’s what they’ve been propagating about. Quite a huge deal. Imo, it’s about the millennials and Gen Z wanting no debt coming forward which is their main market.

Am I also sus that this announcement is a pretty big pump to the price? Ala Elon style haha.

Disclaimer: I hold APT


----------



## Lucky777 (27 August 2020)

Annual out today.


----------



## over9k (29 August 2020)

Yeah, and a big selloff. Combine that with an AUD/USD breakout and it was slammed. 

Might be a nice dip to buy into next week if we're lucky.


----------



## makteb (30 August 2020)

Moving on from the excitement.
We are still long Dec20 $60 Put.  The short August put expired worthless.  Lets assume the long put is paid for.
As there has been no input from any readers lets sell a Sept $102 call ($2 above the psychological $100) and Sept $85 put.  Break even is $108 and $76.  The ideal Sept finish will be $85.01 hugging as close as possible to the Dec Put.
Lets keep gardening, keep working and let time do its thing.  Lets also hope for no excitement over the next 3 weeks despite the upward trend giving APT a little break from the 5 month party!


----------



## over9k (30 August 2020)

I usually like to put my markers in at things like $99.98 or $100.02. You'd be surprised how often people just round things off without thinking and that extra tiny bit can be the difference between getting something filled or not. 

Same goes with ebay auctions - bid $1002 for something and you'd be surprised how often you'll get it over the guy that has a limit of $1k.


----------



## TradingGiraffe (31 August 2020)

total newbie and I think APT will keep going up given more people are switching to the buy now, pay later model. This might become an option to credit cards in the long term and more people are using their money during lock down to cut credit card debt and canceling them.


----------



## makteb (11 September 2020)

1 week to go and APT swimming at $74, looks like we might be proud owners of a BNPL company!

Get your thinking caps on and plan for October...where now brown cow?


----------



## over9k (11 September 2020)

The tech selloff is still biting.

I can see an awful lot of people using afterpay, zip pay etc etc come christmas time. It's a good longer position IMO but I reckon there's more to drop yet.


----------



## TradingGiraffe (11 September 2020)

over9k said:


> The tech selloff is still biting.
> 
> I can see an awful lot of people using afterpay, zip pay etc etc come christmas time.



I agree, also you can see how CBA and others are trying to get into the game but the offering is not as attractive. So it might show that BNPL is a "thing" who would be the winner is the question. APT has the costumers on both sides of the market so that gives them a little moat (not huge)


----------



## over9k (11 September 2020)

Think about this for a second: 

APT/Z1P are in the middle of a tech selloff. But let's take a look at earnings etc this time this year vs this time last year - total blowouts, and only increasing in difference every day. 

So take the natural increase/market penetration you'd expect to see year on year, add the pandemic to it, and you have a recipe for a total blowout once the Q4 earnings are posted. 

The question then becomes, what do we get after that? Well we get competition for one, hence the interest free credit cards etc etc etc, but those products are going to take time to actually penetrate the market - into next year before they really start making a dent kind of time. 

So full disclosure here - I hold a tiny bit of Z1P and APT, am expecting more drop to come through september, and then a blowout earnings after christmas which is when I'll be selling before the competition actually start to eat into their marketshare in any kind of significant way.


----------



## makteb (17 September 2020)

The short put will be assigned and we are now proud owners of $85 APT.
To reduce the the lost in value should APT's stock price decline, we have a few options.

1. sell ATM call
2. sell OTM call
3. wait a few days and see if price moves up to collect more premium.

Closed today at $73.

I would not be selling PUTs yet as the technical are showing price decline.

Remember we have a $60 PUT Dec expiry that has been paid from previous short puts.

Thoughts?


----------



## over9k (17 September 2020)

Tech's getting slaughtered without stimulus in the U.S and AU naturally follows. With there appearing to be almost no chance of stimulus until at least after the election, there's more pain to come.


----------



## makteb (24 September 2020)

How now brown cows...sounds more appropriate for a2m

We have some resistance and support from technical view rather than the linear line with a gradient which i presume most would prefer.  All good things come to an end.

We need to justify holding APT shares at $85.  You need to pick a strike your willing to see your APT leave.

lets keep things simple and action some covered calls to help lower the buy price.

Pick a month that suits your analysis.  Wait for APT to move higher to the call strike.

I'm willing to see my APT leave at $80, will wait till either Nov call sells for at $5.9

The $0.9 will cover the brokerage and a little risk profit from the assignment of acquiring APT and selling APT.

Lets consider selling put, but will do so once the call is in play.


----------



## makteb (29 September 2020)

Nice move by APT.  Sold Nov $80 Call as it inched to $80.

Remember our intention is now to get rid of the shares.  We only acquired this as part of our TP from previous as our put was assigned to allow for covered calls.

The play of the TP was either short put > expired worthless (the ideal situation) OR short put > assignment > covered call > assignment which requires
- margin
- ranging support and resistance
- patience
- discipline 
- profit on the covered call to pay the commission from both assignment

Now, the risk of a short put for October vs premium, what can we risk.
- we do not want to risk assignment
- what is the macro market doing
- other competitors/regulations
- ATH at  $90

If October is no good, shut that idea and move to the next month.  Do not force the play or you will be burnt.

Open to suggestions and feedback...we only know what we know.


----------



## makteb (29 September 2020)

Don't forget the long $60 Dec Put expiry.

Ideally we need to be out of shares as part of risk management particularly if price is hoovering where it is now.


----------



## makteb (1 October 2020)

So far price is hovering between $80-85 where previous support was $75.

No puts placed for October yet as the ROI is not good and entry has not been favorable.  Do not think this is a waste to not sell a put as we have the insurance of the long $60 Dec P, the unexpected could blow you away.  

Lets look now for Nov or Dec PUT.  What do we think is happening?

If you prefer some graphs to paint a picture of what is happening please let me know particularly if new to options.


----------



## over9k (1 October 2020)

I expect the christmas buying season to be absolutely nuts for afterpay.


----------



## Dona Ferentes (20 October 2020)

surged through $100

What Covid crisis? What September pullback?


----------



## makteb (20 October 2020)

APT very nice run.

For those following the options trade, despite being patient, our legging in was 1 week to early.  
Hindsight is the friend that whispers in our ears.s

It is unlikely APT will fall to with the market at the same magnitude.  For that reason, lets be assigned and strategize the next trade.

Lets see what happens in midweek.


----------



## peter2 (31 October 2020)

Is it time to short the BNPL sector and it's #1 flag bearer?  

From what I read APT needs to build it's customer base substantially more in order to grow its sales book. I've no doubt that APT will increase it's customer base but doubt that it'll do it quickly enough to justify it's current share price. 

APT gets its fees from the vendor (4%) and the vendor can't add a BNPL surcharge as it's illegal to do so. Vendors are allowed to charge CC customers a surcharge for using their cards. Will the regulations change to allow vendors to apply a BNPL surcharge?  If this happens, will customers continue to use BNPL if the vendor adds 4% BNPL surcharge? 

There's concerns about the pace of growth, regulatory risk concerns and then the fickle nature of customers who hate paying more than the list price of an item. 

I'm a chartist so should probably stick to that. Comparison chart over the past three months.
APT is holding up much better than the others (Z1P, SZL, SPT). This is probably due to APT's status as #1 BNPL. 
The BNPL bulls may think that it's time to buy the others hoping for the catch up. I'm suggesting shorting APT as it may be overbought.


----------



## sptrawler (16 November 2020)

It looks as though the BNPL sector, is starting to develop the same issues the credit sector has, people spending money they don't have causing long term debt issues. It wont be long before regulation starts to bring these new players back to the field IMO.








						One in five consumers using buy now, pay later miss payments, ASIC says
					

Australia's corporate watchdog says some consumers are suffering harm from using buy now, pay later, warning one in five consumers are missing payments, allowing six companies it examined to rack up more than $43 million in late payment revenue over one year.




					www.abc.net.au
				



From the article:
Australia's corporate watchdog says some consumers are having to cut back on essentials such as meals because of debt they have racked up from using buy now, pay later, warning one in five consumers are missing payments. 
But the Australian Securities and Investments Commission (ASIC) has stopped short of recommending that the sector be regulated in the same way as credit card companies, despite concerns from consumer advocates that it is just another form of credit that allows people to take on too much debt. 
*Key points:*

ASIC has stopped short of recommending that buy now, pay later players be regulated in the same way as credit card companies
The corporate watching's review into six buy now, pay later players found that some were causing consumers harm
The industry is also developing a code of conduct, but consumer advocates have warned that self-regulation does not work


----------



## makteb (24 November 2020)

Watch this journey and see where the adventure takes us.


1. Long April 88 Put.

2. Waiting for short Dec 90 Put to execute.

If your an options trader, don't be shy.  Lets bounce around ideas and rekindle that pioneering flare to fulfill the never ending pot of wisdom.


----------



## over9k (24 November 2020)

I generally stay away from options but I hold and have no plans to sell.


----------



## Dona Ferentes (12 December 2020)

S&P/ASX 20 Index (XIJ)  – Effective Prior to the Open on December 21, 2020
*Action ... Code ... Company *
Addition .. APT .... Afterpay Limited


----------



## over9k (12 December 2020)

Yeah this one's been great. The other ripper has been xero.


----------



## Dona Ferentes (14 December 2020)

Dona Ferentes said:


> S&P/ASX 20 Index (XIJ)
> *Action ... Code ... Company *
> Addition .. APT .... Afterpay Limited



nice to feel included.  Record high


----------



## sptrawler (14 December 2020)

Great pick up you guys, what a brilliant buy.

Wishing I held.


----------



## Dona Ferentes (14 December 2020)

Was having a chat with a neighbour, young bloke in his 30's, a few months ago. As we do, got to talk about the market, and he recounted a tale worth repeating.

He was sick of odd jobs and attached Super accounts, the count of piddling paperwork got to 10, and he decided to do something about it. With less than $40K, he combined all his super funds in a SMSF, and did it his way. Bought 2 shares, Mesoblast and APT. So here he is, just under a year down the track, serendipity in his corner all the way, with a healthy SMSF over $600K. Now, the inability to access it for decades (at least 3!) brought the observation, when APT was $95, he thought he might diversify, take some off the table, but hasn't so far. He did sell MSB locking in some profit, but then went into the Adore float ($7, now $5). Which proves you can't win them all.


----------



## barney (14 December 2020)

Dona Ferentes said:


> With less than $40K, he combined all his super funds in a SMSF, and did it his way. Bought 2 shares, Mesoblast and APT. So here he is, just under a year down the track, serendipity in his corner all the way, with a healthy SMSF over $600K.




I think he's done pretty well


----------



## over9k (14 December 2020)

Yeah all that dude needs to do from here is drop it in a index fund & walk away.


----------



## Dona Ferentes (15 December 2020)

Th


over9k said:


> Yeah all that dude needs to do from here is drop it in a index fund & walk away.



That is exactly what I suggested. But, no success


----------



## over9k (15 December 2020)

Hopefully he doesn't take a round trip from his 600k then.


----------



## qldfrog (15 December 2020)

sptrawler said:


> Great pick up you guys, what a brilliant buy.
> 
> Wishing I held.



Never too late, one of my systems picked it up at open yesterday at 101.01 and it was at 109.93 at the end of the day. Tesla like


----------



## over9k (15 December 2020)

As I said before, the real ripper has been xero.


----------



## Dona Ferentes (14 January 2021)

I don't know about 'soars', but certainly APT benefited


> *Afterpay soars after US rival doubles on Nasdaq debut*
> 
> Buy now, pay later stocks surged on Thursday after US rival and sector pioneer Affirm jumped 98 per cent in its first day of trading, earning Afterpay's founders a $194 million payday.


----------



## Dona Ferentes (14 January 2021)

Afterpay soars after US rival doubles on Nasdaq debut
					

Buy now, pay later stocks surged on Thursday after US rival and sector pioneer Affirm jumped 98 per cent in its first day of trading, earning Afterpay's founders a $194 million pay day.




					www.afr.com
				




Morgan Stanley, which acted as a lead underwriter on the Affirm IPO, hiking its price target on [AfterPay] from $120 to $136 per share.


> _"In our view, Afterpay is well placed to become a global [buy now, pay later] platform, given its relevance in several geographies, high repeat customer usage and best in class sales referral generation for merchants," _Morgan Stanley analyst Andrei Stadnik wrote to clients on Wednesday.
> _"We think Afterpay can continue to build out its global platform in 2021 and deliver a 60 per cent, three-year revenue [compound annual growth rate], despite facing tougher growth competition."_




Mr Stadnik noted that Afterpay is "pivoting to profitability" as it prepares to launch in the European and Asian markets, with estimated revenue increases of between 2 per cent and 6 per cent by fiscal 2023.


> _"Valuation seems challenging, but reasonable in the context of global platform building payments peers," _he added_._




- _until it isn't. Crowded sector. Affirm soon to set up in Australia._


----------



## over9k (14 January 2021)

I hate to be that guy, but an awful lot of studies (bleuch) have shown that first mover advantage is the most important of all. 

I know that this is kind of a homogenous product, but so are credit cards, and they all make tons of money.


----------



## galumay (14 January 2021)

I hope people remember what these idiot brokers said when the BNPL bubble pops. It should really result in criminal charges. 

_"Valuation seems challenging, but reasonable in the context of global platform building payments peers," _he added_."_

I guess the other side of the coin is anyone naive enough to swallow this gibberish deserves everything coming to them.


----------



## sptrawler (14 January 2021)

galumay said:


> I hope people remember what these idiot brokers said when the BNPL bubble pops. It should really result in criminal charges.
> 
> _"Valuation seems challenging, but reasonable in the context of global platform building payments peers," _he added_."_
> 
> I guess the other side of the coin is anyone naive enough to swallow this gibberish deserves everything coming to them.



Well one would think eventualy people run out of money, spending four weeks ahead, I wonder who underwrites all this?
But hey when you guys started the competition and they were 8 bucks, I said to the missus, how about we buy a thousand, she said dont be an idiot.
So I didnt.😪


----------



## Dona Ferentes (21 February 2021)

The AFR leans into Week 3 of Reporting Season with the poser:


> The ASX is facing one of its biggest reporting season tests this week, with some of the market’s most highly valued companies set to reveal results, including _*buy now, pay later *_darling Afterpay. Afterpay is the highlight in a week stuffed full of companies where investors are anxious to understand the exact fallout from the COVID-19 pandemic...




and the interest will be high, as every hopeful Payments platform and fintech that has run up recently, comes out with a response to ASX Query #3 (_Is there any other explanation that [the company] may have for the recent trading in its securities? _) along the lines of:


> ...[The Company] notes that the Payments and Fintech sectors globally have seen significant growth and re-rating by markets, in particular as a result of COVID-19 and the rapid digital transformation of payments and financial services...


----------



## greggles (25 February 2021)

H1 FY21 Results are in:






Total income up 89% but operating loss widens to $76.5 million. APT is currently in a trading halt until Monday as they will be issuing convertible notes to raise more capital.

The big question is what will the market do on Monday?


----------



## galumay (25 February 2021)

LOL! No doubt retail investors will fill the APT buckets so the cycle of capital destruction can continue.


----------



## Austwide (25 February 2021)

Z1P dropped about a dollar this morning. I suspect somewhat based on  APT's report.


----------



## Dona Ferentes (29 March 2021)

and another ominous chart, perhaps, @finicky .....  AfterPay could, might well break $100?


----------



## finicky (29 March 2021)

@Dona Ferentes 
Could easily by looks. Another I'd be watching not buying if interested. Does seem to be a sector pattern happening. I'll be interested to follow MP1, slim possibilty but might be a buyer of that, need something else to come in.


----------



## over9k (29 March 2021)

I sold some today so it will now go up


----------



## beejeboi (22 April 2021)

Following the move of Afterpay to the US markets i can see big things coming. This article says it well. Theres just a lot more money in the US. Big things are coming








						Afterpay’s (APT.ASX) Biggest Stock Price Catalyst Yet. - Prophet Invest | Investing and Wealth
					

Afterpay has its eyes set on the USA. The Revolutionary Buy-Now Pay-later (BNPL) company Afterpay is considering listing on the US stock market. In what is




					prophet-invest.com


----------



## over9k (22 April 2021)

Yes afterpay's been a pretty wild ride but still a lot calmer than Z1P that's for sure: 






Kind of amazing how they've both ended up in almost the same place despite the insanity of the movements over the last year.


----------



## Dona Ferentes (6 May 2021)

And under $100 a share


----------



## over9k (7 May 2021)

It's a lot more than under 100 now: 






Kinda thinking about a top up tbh.


----------



## over9k (7 May 2021)

APT & Z1P both right on support levels now:


----------



## over9k (7 May 2021)

Grabbed some at 93 on the climbout for a cheeky day trade today: 






Anyone else still holding?


----------



## bsnews (8 May 2021)

over9k said:


> Grabbed some at 93 on the climbout for a cheeky day trade today:
> 
> View attachment 123897
> 
> ...



I am not in the APT cheer squad, being the first one in has helped it go big but I don't like the sums and how it has to generate income. The model looks like it will come under a lot of pressure as time moves on and still no sign of profit.
ZIP I just buy whenever it goes below $6.50 with whatever funds I have. I like how Zip clips the ticket not only on the sale but on fees as well and my call is that ZIP will become the market leader in time  buts that just my musings
Tyro I also like as from my dealings the business is well ran and fills the niche need for a growing list of retailers. Yes I know first hand about the outage but it was handled as well as could be. i have no shares in Tyro ATM.


----------



## over9k (8 May 2021)

Alternatively, buy both like a TOTAL degenerate


----------



## sptrawler (8 May 2021)

What is the long term play with the BNPL model? I missed out when I should have bought, but Im still wary as to where it is all going.
Are the banks going to buy them out, are they going to keep losing money, are they going to be regulated, are they going to disappear?


----------



## over9k (9 May 2021)

They'll keep going the way they are until something bad happens and hits the news and then the government will have the exact excuse they need to step in and regulate in some way that benefits their political donors. 

It's legacy media vs social media but with lines of credit.


----------



## over9k (29 June 2021)

APT's been on a nice rebound lately: 







And now expanding, good interview on the news this morning: 









Credit cards appear to be a dead business.


----------



## frugal.rock (2 August 2021)

Hot off the press. Takeover of the month, year perhaps?

SQUARE TO ACQUIRE AFTERPAY.

"implied transaction price of approximately A$126.21 per Afterpay share"

Check the 108 page announcement for further details...


----------



## Dona Ferentes (2 August 2021)

$39 Billion takeover

Square, which trades at a market capitalisation of $US115 billion in New York, will set up a *secondary listing on the Australian Securities Exchange*. This will allow Afterpay shareholders to trade Square shares via CHESS Depositary Interests (CDIs) on ASX and Afterpay shareholders will be able to elect to receive NYSE-listed Square shares or CDIs.



> “_Square and Afterpay have a shared purpose. We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles_,” Mr Dorsey said in a statement, before tweeting about the deal.




Square has 70 million customers, compared to Afterpay’s 16 million. Square will use Afterpay to boost its merchant and retailing system, and its Cash App. Afterpay will be integrated into Square’s merchant platform and it will also become part of the Square Cash App, allowing Square to better compete with the likes of PayPal, Affirm and Klarna in the United States.


----------



## over9k (2 August 2021)

So was anyone silly enough to pick this for the stock picking comp? 

Off to a good start if so


----------



## mark_au (2 August 2021)

is it time to cash out now or wait the merger ?. Will changing the ownership to the USA complicate our taxation reporting going forward ?


----------



## Dona Ferentes (2 August 2021)

mark_au said:


> is it time to cash out now or wait the merger ?. Will changing the ownership to the USA complicate our taxation reporting going forward ?



The CDIs will be ASX listed and report in local currency. (Holders will have to elect )


----------



## mark_au (2 August 2021)

Dona Ferentes said:


> The CDIs will be ASX listed and report in local currency. (Holders will have to elect )



I did see that, but im not familiar with  CDI's are they treated as shares/dividends etc for taxation purposes ??

i just found this https://www.asx.com.au/documents/settlement/CHESS_Depositary_Interests.pdf  , a brief scan seems to indicate that they do


----------



## over9k (2 August 2021)

Buy the rumour, sell the news.


----------



## qldfrog (3 August 2021)

I have owned apt with the systems but was not recently...damned
If you can trade it on the asx before the conversion, it is usually easier just to avoid paperwork, and that laziness is usually not too expensive.. plus you get your cash back and can trade immediately or buy a bottle of Pinot noir to celebrate....


----------



## Knobby22 (3 August 2021)

Square buys Afterpay for 39 billion.
Deal to be by 9.75 billion paid fortnightly in 4 easy payments.


----------



## qldfrog (3 August 2021)

Knobby22 said:


> Square buys Afterpay for 39 billion.
> Deal to be by 9.75 billion paid fortnightly in 4 easy payments.



So you may not
want to have shares in Square....an aft customer.....😉


----------



## sptrawler (4 August 2021)

Interesting article concerning afterpay and the BNPL sector, thought provoking, to say the least.
The very reason they had the royal commission, into unconscionable lending to customers, appears to be repeating IMO.








						Afterpay takeover highlights the need to rethink financial regulation
					

Fintechs aren’t banks and aren’t regulated like banks. But they are increasingly offering a range of services and products that look like - and compete with - banking services and products.




					www.smh.com.au
				



From the article:
Fintechs, even the big ones, aren’t banks and aren’t regulated like banks. But they are increasingly offering a range of services and products that look like, and compete with, banking services and products.
Regulators around the world have generally encouraged the emergence of fintechs to generate competition to traditional lenders and drive consumer-friendly innovation even as they have loaded ever more and ever more costly prudential regulation and obligations on the banks, such as stringent anti-money-laundering laws.
The BIS paper notes that the big tech firms entering financial services have the capacity to scale up very rapidly because of their existing hoards of customer data from their non-financial e-commerce or social media activities and by harnessing their inherent network effects in digital services.
The big techs have provoked intense debate and looming regulation on competition and data privacy issues around the world – in the US they even face the threat of break-ups – but financial regulators are still trying to get their minds around the balance between the pro-competitive force they represent against banks and other traditional institutions and the risks they might pose to system stability, fair competition and the long-term interests of consumers.

In addition to traditional regulators’ concerns – financial risks, consumer protection and operational resilience – the entry of big techs into financial services created new challenges around the concentration of market power and data governance, the paper warned.
One of the core issues banking and competition regulators confront in trying to determine how to respond to the rise of the fintechs is the asymmetry of regulation, particularly as it relates to data.

Australian banks, and banks in some other jurisdictions, now operate in “open banking” regimes where they are required to provide access to their customer data and customers can more easily move their accounts. But tech companies, a number of who are larger than any bank, don’t have to provide access to their data and their customers are effectively locked into their networks.

Most non-banks, regardless of size, generally face activities-based regulation, where they might be required to hold a licence for highly specific business lines, if indeed any licence is required.

Banks and other big regulated institutions faced both activities-based regulation and entity-based, or whole-of-company, regulation to try to ensure that the aggregation of their activities doesn’t pose risks to financial stability, competition, consumer protection, money-laundering and other public policy objectives.


----------



## Dona Ferentes (4 August 2021)

@sptrawler  That is exactly why the BNPL sector has been on a tear  (ripper or lachrymal ?).  Little regulation, exploiting a vulnerability.

But I have to give it to the convergence of fintech possibility and pushback on smug credit arrangements.

I had the thought, when looking at all the new pile-ins trying to emulate APT, if only they had been really really smart in 2017 or whenever, when they examined the disruptor model and said "_We can do this, as well (and maybe better)"_, and just put their money on APT at $2 to $4 way back when or even $6 by 2018, then they would probably have made more money than through their start-ups now flooding the space?

(_But winner take all and creative destruction doesn't work this way_)


----------



## sptrawler (4 August 2021)

Dona Ferentes said:


> @sptrawler  That is exactly why the BNPL sector has been on a tear  (ripper or lachrymal ?).  Little regulation, exploiting a vulnerability.
> 
> But I have to give it to the convergence of fintech possibility and pushback on smug credit arrangements.
> 
> ...



I was keen on APT when the pick the winner thread started on ASF, also my daughter who always has hated credit and paid for everything cash, told me she was using it.
Well long story short, that same daughter one year on is struggling to pay her bills, I told her to stop using APT as it is just encouraging her to spend next weeks pay. She has stopped and is starting to get on top of her bills again, but it is just a credit card, by another name IMO.


----------



## over9k (4 August 2021)

Afterpay taps out at like $1500 credit.


----------



## sptrawler (4 August 2021)

over9k said:


> Afterpay taps out at like $1500 credit.



Yes but $1500 is a lot of money to a deaf single mum of two, who earns $38k a year, and wants to buy her kids things.


----------



## noirua (22 August 2021)




----------



## basilio (25 August 2021)

Afterpay is fascinating...
Yep their sales are exploding. and yep their ongoing losses are also rising steeply.

The owners have made out like multi billion dollar bandits and neatly managed to sell at a very handsome price . 

Couple of good stories on the current situation and how they managed to pull everyone together to create this spectacular success. Frankly it reminds a lot about Babcock and Brown or going back further Bernie Cornfields of  IOS fame.









						It's the $39 billion company that's never made a profit, and its losses just got bigger
					

In its latest release to the ASX, Afterpay reveals a $156.3 million net loss, 689 per cent worse than its 19.8 million loss last financial year, with rival Zip reporting an even bigger deterioration in its bottom line. Success, it seems, comes at a cost.




					www.abc.net.au
				











						'The secret fairy dust' that helped Afterpay go from zero to $39b in Australia's biggest ever corporate takeover
					

Afterpay's Anthony Eisen and Nick Molnar have taken the group from zero to $39 billion in just six years but it hasn't been an easy ride.




					www.abc.net.au
				












						Investors Overseas Services (I.O.S.) - Huge 1960's Fraud - Bernie Cornfeld and Robert Vesco
					

Investors Overseas Services (I.O.S.) - Huge 1960's Fraud - Bernie Cornfeld and Robert Vesco




					scripophily.net


----------



## galumay (25 August 2021)

basilio said:


> The owners have made out like multi billion dollar bandits and neatly managed to sell at a very handsome price .




They must be pissing themselves laughing, losses accelerating massively, outgoing operational cashflow doubling, margins compressing, bad debts rising, every meaningful financial metric going the wrong way - all as the business grows in scale!! Finding Square was like finding their own Alan Bond!


----------



## makteb (28 August 2021)

galumay said:


> They must be pissing themselves laughing, losses accelerating massively, outgoing operational cashflow doubling, margins compressing, bad debts rising, every meaningful financial metric going the wrong way - all as the business grows in scale!! Finding Square was like finding their own Alan Bond!



What they have created is a brand... AFTERPAY.
First to market.
They are selling that brand, the infrastructure of their model, the customer base and potential blue sky.

From a global perspective, they did a great thing for Australian fintech.

At the end of the day , the market will do what it does, our task, is to collect the XX% and cut our loses.


----------



## Dona Ferentes (10 September 2021)

_looking like a done deal, and holders need to make a decision. A couple of fund managers have their say:_

*Matthew Kidman (Livewire Markets) :*_ The next one is not a surprise because it’s been a remarkable story. In fact, I’m reading a book about it called _ _Buy Now Pay Later_ – that’s how special the company’s been. Afterpay. It’s unusual because it has got a takeover offer from Square and it’s going to disappear from the Australian landscape. Do we *hold onto it, or do we sell?* Chris, let’s go with you; Afterpay.

*Chris Stott (1851 Markets) :*  Hold, Matthew. Nick and Anthony have done a terrific job since the IPO,  and it's a tremendous achievement to secure the deal with Square. We would say people should hold, and then roll into the Square offer. Hold the Square shares if you can. We think certainly with them as a partner now that they have got significant capital firepower behind them to really drive their next level of growth over the medium to longer term.  So hold.

*Matthew Kidman (Livewire Markets):* It is a big jump, James, to go with Square. Obviously, they have got a good payment system, they are  very big in the US. But they like to trade around in Bitcoin as well,  so it is an exotic company to join. Buy, hold or sell?

*James Gerrish (Market Matters):* I would be holding it if I held Afterpay at this point in time. Obviously,  the next 12 months are going to be all about integration, so putting the  Afterpay business into the Square ecosystem and trying to get a really  strong level of growth coming out the other side. For my money at the  moment, I would be a buyer of Zip Co (Z1P), in the buy now pay later space. I think that has got more upside in the short term.

But I think the other key thing in BNPL at the moment is the validation that we have seen from Square coming in, as well as Amazon doing a deal with Affirm.  So, those two things have really validated the sector. So for me, it's here to stay, and I would be a holder of Afterpay, but a buyer of Zip.


----------



## Dona Ferentes (21 November 2021)

SQUARE INC.      

*Listing date*7 January 2021 11:00 AM AEDT ##*Company contact details*https://squareup.com/au/en
Ph: +1 (415) 375-3176*Principal Activities*Square is a global fintech company. It builds tools that aim to empower businesses and individuals to participate in the economy.*GICS industry group*TBA*Issue Price*N/A*Issue Type*CHESS Depositary Interests*Security code*SQ2


----------



## Dona Ferentes (2 December 2021)

APT perilously close to $100.00 as my _Royal Quiet Deluxe _clunks away



> Afterpay will postpone the shareholder meeting that was to approve its acquisition by Square, citing a delay with regulatory approval by the Bank of Spain. Its stock fell by almost 5 per cent as the market opened.





> Separately, Square said it will change its name to Block.


----------



## Ann (2 December 2021)

I wonder if Jack is getting cold feet? 









						Jack Dorsey’s Square Is Now Block
					

Payments company Square has a new name befitting its CEO's blockchain obsession.




					www.wired.com


----------



## Dona Ferentes (2 December 2021)

Ann said:


> I wonder if Jack is getting cold feet?



Some sellers from when the run happened would be happy. (nearly 10 million changed hands at $130)

Square said its organisational structure and operating model will remain the same.


> Many Australian investors are attempting to understand Mr Dorsey’s company because when the Afterpay deal completes, Block shares will trade on the ASX.
> The Square name will be maintained for the “Seller” business, which provides an e-commerce software and banking services for merchants. The company said the new corporate name “allows the Seller business to own the Square brand it was built for”.
> Afterpay will sit between the Square and Cash App divisions of Block. Afterpay will not be its own business unit but the Afterpay teams will be integrated into both the Square and Cash App businesses.




Afterpay and Square said they still expect the deal to be competed in the first quarter of calendar 2022, its existing timeline.

Both companies said they are considering options to proceed with a scheme meeting before the end of the year, but it may be delayed “until the new year”.

Analysts said they did not expect the delay to impact on the closure of the deal.


> _“We continue to believe the risks of the transaction closing are minimal_,” said RBC Capital Markets analyst Chami Ratnapala.




Square shares fell by 6.6 per cent to $194.50 in New York on Wednesday. Shares in Afterpay were down 5.3 per cent at $100.84 after an hour of trading on Thursday.

Square’s share price and by extension that of Afterpay has been caught up in a sell-off of high growth low profit tech stocks, having plunged around 20 per cent in a month.

Square has lost a third of its value since its share price peak of $289 on August 5, days after the acquisition was announced.

But *the spread between the Afterpay share price adjusted for currency levels and the agreed conversion ratio, and the Square share price has remained close to zero.* That suggests traders believe there is little to no risk that the transaction won’t complete.


----------



## Ann (2 December 2021)

Dona Ferentes said:


> But *the spread between the Afterpay share price adjusted for currency levels and the agreed conversion ratio, and the Square share price has remained close to zero.* That suggests traders believe there is little to no risk that the transaction won’t complete.



Thank you @Dona Ferentes that is very interesting, almost beyond my comprehension coping with a double negative after two glasses of bubbly, but got there in the end! My takeaway from what you say, it is gonna happen. 
Looking at the chart I think I would be a touch leery but I have been wrong about APT in the past.


----------



## Dona Ferentes (2 December 2021)

@Ann  for me, red wine aids the judgment. 👍

The only skin I have in this game is my friendship with two mates; one bought under $20 and the other at $100. Not giving advice, I thought a bit of diversification would be in order (held in SMSFs)


----------



## makteb (3 December 2021)

Thanks for the updates @ Dona & @ Ann


----------



## Miner (17 December 2021)

Interesting for both APT and ZIP or many BNPL to join the queue ?
US regulators probing Afterpay and Zip over buy now, pay later consumer protections








						US regulators probing Afterpay and Zip over buy now, pay later consumer protections
					

Australian companies Afterpay and Zip are being probed by US regulators over their consumer protections, as the buy now, pay later sector booms and concerns grow about customer debt.




					www.abc.net.au


----------



## Miner (17 December 2021)

Miner said:


> Interesting for both APT and ZIP or many BNPL to join the queue ?
> US regulators probing Afterpay and Zip over buy now, pay later consumer protections
> 
> 
> ...











						BNPL bloodbath: Sector sells off again after US regulators flag more oversight - Stockhead
					

The CFPB said on its website that it was particularly concerned about the impact BNPL providers have on the accumulation of consumer debt.




					stockhead.com.au


----------



## Dona Ferentes (6 January 2022)

and AfterPay as low as $72 a share today  ... the excuse: spooked by the Fed.

_Square peg in a black hole_


----------



## Wedgy (6 January 2022)

A company which is not making a profit is worthless, unless the expectation is that they will make a profit in the future and that is what the SP is based on, future profits. Problem is I am not sure if APT will ever make a profit, if they don't BNPL will go down in history as another dotcom bubble burst, my opinion only, DYOR.

Have traded APT regularly in the past, first bought in Jan 2018 at $7.22 and last sold early 2020 at average about $35 and never bought back in, oops, but no regrets made a healthy profit every trade.


----------



## Ann (6 January 2022)

Vanguard and Blackrock, have been buying and selling this like no one's business over the last few months. Not suggesting they would have had a coordinated manipulation of the price in any way (she says sarcastically 😏).

They are both out now but I just bet they are shorting this like a mad thing but staying under the radar by holding less than a reportable percentage.

Anyway, certainly, a boy in shorts wet dream happening here.


----------



## Ann (6 January 2022)

...and this is what I was looking at on the Westpac site under shareholders, I didn't do any close-up and personal investigation in the announcements.


----------



## KevinBB (6 January 2022)

I'm guessing here ... but the majority of those share sales and purchases would be reported because of the reduction in WBC's market cap over the past 6 months, compared to other large stocks, and the resulting daily adjustment inside the ETFs that BlackRock manage.

The telling statistic for me is that, prior to today's drop, the XTL index is still more than 4% below its August highs, compared to XJO's 0.88%, mainly because of the drop in Westpac's price, and now Afterpay's price, over the past 6 months (from memory) or so.





Figures as of yesterday's close.

KH


----------



## rnr (6 January 2022)

Ann said:


> Vanguard and Blackrock, have been buying and selling this like no one's business over the last few months. Not suggesting they would have had a coordinated manipulation of the price in any way (she says sarcastically 😏).
> 
> They are both out now but I just bet they are shorting this like a mad thing but staying under the radar by holding less than a reportable percentage.
> 
> Anyway, certainly, a boy in shorts wet dream happening here.



Hey Ann,

I seem to recall that you made a post recently stating that you liked island reversals! 

Cheers, Rob


----------



## Ann (6 January 2022)

rnr said:


> Hey Ann,
> 
> I seem to recall that you made a post recently stating that you liked island reversals!
> 
> Cheers, Rob




I cannot tell you how pleased I missed these_* five * _Island bottoms, Rob. I previously mentioned this over in my KISS thread in the trading journals section. Although right from the start the chart looked more like a trader's toy than a genuine business. It is not a stock I have ever contemplated or watched. It always looked like a high priced pump and dump to me.

I can only imagine how many people must have been caught up as it isn't a rare or unheard of chart pattern. It can only leave a really bad taste in many folk's mouths. What is the saying "fool me once, shame on you, fool me twice shame on me." Fool me five times and I will hate you forever and never forget. That last bit was my make up! 

...and the chart of APT I had previously put up on KISS...


----------



## Garpal Gumnut (6 January 2022)

Ann said:


> I cannot tell you how pleased I missed these_* five * _Island bottoms, Rob. I previously mentioned this over in my KISS thread in the trading journals section. Although right from the start the chart looked more like a trader's toy than a genuine business. It is not a stock I have ever contemplated or watched. It always looked like a high priced pump and dump to me.
> 
> I can only imagine how many people must have been caught up as it isn't a rare or unheard of chart pattern. It can only leave a really bad taste in many folk's mouths. What is the saying "fool me once, shame on you, fool me twice shame on me." Fool me five times and I will hate you forever and never forget. That last bit was my make up!
> 
> ...



Not meaning to be pessimistic but if there is another crash what do posters feel this little piglet’s intrinsic worth would be.

Obviously it would bounce and fall off previous support and resistance lines.

gg


----------



## Dona Ferentes (6 January 2022)

Garpal Gumnut said:


> Not meaning to be pessimistic but if there is another crash what do posters feel this little piglet’s intrinsic worth would be.



Zip?


----------



## Ann (6 January 2022)

KevinBB said:


> I'm guessing here ... but the majority of those share sales and purchases would be reported because of the reduction in WBC's market cap over the
> 
> 
> Ann said:
> ...



Sorry to confuse folks Kevin, I meant, I was on my Wespac trading account site and went to APT shareholder section. This is a list of shareholder sales and purchases over a given period for APT, nothing do do with WBC the company. Hope that makes it a bit clearer.


----------



## Ann (6 January 2022)

Garpal Gumnut said:


> Not meaning to be pessimistic but if there is another crash what do posters feel this little piglet’s intrinsic worth would be.
> 
> Obviously it would bounce and fall off previous support and resistance lines.
> 
> gg




I will put up another chart on the weekend GG and see what I can see, as in where there may be a potential support line somewhere along the line. After all BR and V need to buy some stock to return before they start to short it again. So let's see if we can find a level where they may do that.


Dona Ferentes said:


> Zip?



...or do you mean Z1P Dona?


----------



## Ann (9 January 2022)

Garpal Gumnut said:


> Not meaning to be pessimistic but if there is another crash what do posters feel this little piglet’s intrinsic worth would be.
> 
> Obviously it would bounce and fall off previous support and resistance lines.




I doubt holders will need to wait for another crash to see this work its way down the chart and start bouncing or failing other support lines. 

Now as far as its intrinsic worth, how would one know when a company is showing -156.3 net profit down from the previous year of -19.78 net profit. As Dona said...


Dona Ferentes said:


> Zip?




Speaking extrinsic value, whatever the mug punter can be sucked into paying?

Without banging on for ages as it is all on my chart, there appears to be support around now at $70 to $72, although it has failed a bullish falling wedge so it may not offer much support.

I note the NVI indicator is showing the 'smart money has been moving away from APT for some time.


----------



## Dona Ferentes (9 January 2022)

Square, soon to list as *Block *... when clearance from Spain comes, the last step in formalities


----------



## Dona Ferentes (12 January 2022)

Garpal Gumnut said:


> Not meaning to be pessimistic but if there is another crash what do posters feel this little piglet’s intrinsic worth would be?




it went up today, $77.00 close and a 5% lift. And for optimism, try this, from Macquarie:


_Macquarie says that the Bank of Spain’s (BoS) approval of Block’s acquisition of Afterpay has created a short-term opportunity for Afterpay shareholders. Earlier this morning, the Bank of Spain approved the transaction, marking the last regulatory hurdle for the deal._



> “_Since announcement of the proposed acquisition, Afterpay shares have been trading largely in line with Square’s (Block), since the beginning of 2022, however, the discount gap has widened, in our view reflecting potential risk that the deal would not go ahead due to delays from BoS approval,_” said Macquarie analyst Wei Sim.  “_This has created a short-term opportunity for Afterpay shareholders as the gap between the two should now close as all regulatory approvals have been received._”




_The broker noted that Afterpay’s share price should trade in line with Block’s going forward which it believes is still *undervalued*. Macquarie retained its “outperform” rating on Afterpay with a price target _*of $160.*


----------



## CityIndex (14 January 2022)

$APT is currently trading at its lowest levels since September 2020 after tech stocks resumed their sell-off during US trading last night.

The stock looked like it could be gearing up for a new leg higher on Wednesday after news broke that Bank of Spain had provided the final approval needed for Afterpay’s acquisition by Block. But selling pressure today has pushed $APT to break below support around $70.

It’ll be interesting to see if buyers look to accumulate shares at this level in the build-up to the takeover, or if the prospect of tighter monetary policy sparks a deeper pullback.

Of course, all trading carries risk, so the situation should be closely monitored before any decisions are made.


----------



## over9k (17 January 2022)

Yeah so this has been going well lately hasn't it? 


APT's now being booted from the ASX200.


----------



## makteb (19 January 2022)

over9k said:


> Yeah so this has been going well lately hasn't it?
> 
> 
> APT's now being booted from the ASX200.



Puts would be doing well


----------



## InsvestoBoy (19 January 2022)

over9k said:


> Yeah so this has been going well lately hasn't it?
> 
> 
> APT's now being booted from the ASX200.




Not because it's dropped, because they are getting taken over. Block will be taking it's place in the ASX 200. https://www.aussiestockforums.com/threads/s-p-asx-200-xjo-block-inc-listing.36805/


----------



## Dona Ferentes (20 January 2022)

Block shares listed quietly on the ASX on Thursday with none of the fanfare and adulation that greeted Afterpay’s monster deal with the US-based payments tech company formerly known as Square.

The intervening five months have seen a massive sell-off in tech stocks and increasing regulatory scrutiny on Afterpay’s buy now, pay later model in the United States, the main attraction for Block’s purchase. Shares in the payments giant founded by Jack Dorsey began trading on the ASX at a price of $176.08 and stayed within a tight band and with low volumes for most of the day.



> “_Block is a lot less relevant for domestic investors, and we’ve seen with other dual listings they can sometimes drop off people’s radar_,” said Jun Bei Liu, portfolio manager at Tribeca Investment Partners. “_At the same time, the Block business is so different to Afterpay that investors will either take some time to become comfortable with it or will look elsewhere._”




Jamie Hannah, deputy head of investments and capital at VanEck, pointed to rising bond yields as a persistent problem for companies like Block. Mr Hannah said the buy now, pay model will be under pressure once interest rates increase and the likelihood of repayment falls.


> “_Like many technology companies of recent years, there has been a big push for revenue growth at the expense of profit,” Mr Hannah said, adding there is a real risk to companies that aren’t generating a profit when markets turn south.  “Block currently makes credit card readers that plug into mobiles amongst many other features_,” he said. “_By purchasing APT, Block is expanding its offering into the finance space by offering alternatives to paying ‘now’. This will no doubt come at a risk of overextending credit in a rising rate environment._”




Trading under the ticker SQ2, an estimated 20 per cent of Block’s total market is represented through CHESS Depository Interests (CDIs) on the ASX.


As an investment case, Block has two main parts to its business. Its Seller business manages payments and lends money to merchants, while its Cash App business allows consumers to transfer, spend and invest money. Thanks to the slick technology, Square could  attract a wave of younger consumers and tech businesses comfortable with operating their finances through smartphone apps. As it stands, the company has 4 million merchants and 40 million Cash App active users on the platform.

Ms Liu said Tribeca, which had a substantial holding in Afterpay, sold out of the buy now, pay later business once the Square deal was announced.


> “A_ lot of Afterpay investors have faced this challenge because Block is a very different type of business_,” she said.




Mr Hannah, who also sold out of Afterpay once the deal was announced agreed. 


> “_We’ve made good returns out of APT, but in the current environment we’re happy to lock in our return and look to better investments,_” he said.


----------



## System (7 February 2022)

On February 2nd, 2022, Afterpay Limited (APT) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between APT and its shareholders in connection with the acquisition of all the issued capital in APT by Lanai (AU) 2 Pty Ltd, a wholly owned subsidiary of Block, Inc., formerly known as Square, Inc..


----------



## Miner (12 April 2022)

Why not company sells it shares to pay the debt and show a profit.
The balloon has been pricked for sure. This will probably give a domino effect on all BNPL stocks

Afterpay’s half-year loss balloons to $345.5 million​Tom Richardson
Share post
*Afterpay-owner Block has released accounts showing that Afterpay’s net loss ballooned to $345.5 million for the six months ended last December 31 from $79.2 million in the year-earlier period.*

Afterpay’s operating loss nearly* quadrupled to $263.7 million* for the six months ended December 31, from the year-earlier $68.2 million.

Total income climbed 54 per cent to $644.9 million. Income from merchant fees made up $560.7 million, with late fees and other income reaching $78.5 million.

Bad debts ballooned to $176.7 million over the six-month period, versus $72.1 million in the year-earlier period. In effect bad debts made up 27.4 per cent of total revenue over the half-year.

In February, Block completed its acquisition of Afterpay by offering 0.375 Block shares for every Afterpay share.


----------



## waterbottle (12 April 2022)

I can't see their balance sheet improving... BNPLs peaked during covid lockdown + cheap money + free cash for individuals.

Looks like exec did well to sell when they did


----------



## Dona Ferentes (19 April 2022)

waterbottle said:


> I can't see their balance sheet improving... BNPLs peaked during covid lockdown + cheap money + free cash for individuals.
> 
> Looks like exec did well to sell when they did



all true , @waterbottle .

and now we have this published in a national newspaper


> _Consumer rights groups in Australia have been blasting their energies attempting to rein in the buy now, pay later industry ... on the basis shoppers are suffering financial stress from companies not subject to usual credit protection laws. On the contrary, the shocking state of buy now, pay later accounts handily surmise one of the largest transfers of wealth (and Miele dishwashers and Fisher & Paykel fridges) from moronic shareholders to penniless consumers in recent memory._





> _Take Afterpay, for instance. Unlike Zip, Afterpay conducts no credit checks on its customers before extending them, er, credit, of between $600 and $2000. If a customer decides not to make a single repayment on their newly purchased iPhone, the harsh punishment is ... a free iPhone! There are no credit history blacklists, and debt collectors are hardly kneecapping customers. The customer is just prevented from using the service again. And shareholders pay for it!_


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## sptrawler (19 April 2022)

Dona Ferentes said:


> all true , @waterbottle .
> 
> and now we have this published in a national newspaper



Well we did say it was a very shaky model when they first started, wish I had jumped on board though. 😩


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## The Triangle (18 May 2022)

https://www.news.com.au/finance/money/costs/afterpays-move-into-hairdressers-restaurants-and-butchers-labelled-dangerous/news-story/d060fb55b6b17a673a7cc1ebeea858e4
		


There will surely be a lot more appetite to go after these BNPL guys now that afterpay is "American" owned and if labor get voted in as I recall they were ones looking for additional regulation in this sector.    It's still crazy to me that ASIC has gone after the likes of Silverchef and Cash Converters over the past few years, but all these online lenders just get ignored and are allowed to operate with pretty well zero regulation.


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