APT - Afterpay Limited

[rnr]

@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!

 

[Value Hunter]

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.

 

[Knobby22]

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.

 

[bigdog]

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.

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[Knobby22]

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.

 

[bigdog]

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

 

[bigdog]

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.

359

 

[bigdog]

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.

 

[leyy]

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

 

[bigdog]

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

 

[Knobby22]

Interesting.

 

[bigdog]

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

 

[bigdog]

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:

 

[bigdog]

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]

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.

 

[sptrawler]

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.

 

[Knobby22]

They can do that with credit cards to a much larger amount.

 

[sptrawler]

They can do that with credit cards to a much larger amount.

Yes good point knobby.

 

[jandrews]

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.

 

[aus_trader]

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.