Australian (ASX) Stock Market Forum

APT - Afterpay Limited

Jump to new
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.
Click to expand...

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.
 
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.
Click to expand...

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.
 
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.
~
 
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.
Click to expand...
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.
 
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.

upload_2018-9-7_17-10-39.png
 
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.

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

View attachment 89213
Click to expand...
OT
why is that line shown in yellow? ( I mean what is the significance of the yellow)
 
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
 
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.

upload_2018-9-12_20-18-48.png
 
The SPP closed yesterday and SPP price is yet to be announced

I would expect to be high $16

SP is being clobbered today

upload_2018-9-18_14-4-20.png
 
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.

upload_2018-9-20_10-40-55.png


194
 
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.
 
Top