i don’t think their valuations are accurate but yes, their real revenue is more realistic. Valuation is expectation of what the company will make in revenue.
Actually it’s an reincarnation of the decades old layaway programs.
I think it’s more financially savvy for consumers to do BNPL instead of putting it on credit cards. They are committed to pay X amount every month and the loan will be paid off fairly quickly. Contrast that with putting it on credit cards that can linger on for years and years incurring 20% interests rate.
The revenue is realistic. It used to be a $1M sale could be sold with 3 year financing. The $1M was recognized as revenue immediately. Now it’s divided evenly over the 3 years.
It’s the same for SaaS companies. Most are selling 1-3 year subscriptions. The payment is upfront or annually. However, they have to recognize revenue monthly over the life of the contract. A lot of them will report deferred revenue as a metric. That’s a measure of what’s been collected but can’t be recognized as revenue yet.
That’s one reason they cash slow so well. They get paid now and their expenses happen over time. If they are fast growing, then they are cash flow machines. It’s how they can be unprofitable but cash flow positive.
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Feel like an idiot for not buying AFRM. 45%+ today.
True, how to spot these before they pop up?
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Should be easy for you since you’re working. Normally you can hear the rumbling. I got the rumbling from the web… BNPL talks get louder so I thought it may be time but didn’t know is so fast.
‘Buy Now, Pay Later’ Consumer Financing Takes On Credit Cards
While BNPL has been on the radar of payment companies, two recent events give validity to views that it’s a long-term trend, not a flash-in-the-pan amid the coronavirus pandemic. Digital payment company Square (SQ) on Aug. 1 agreed to purchase BNPL provider Afterpay in an all-stock, $29 billion deal.
Then e-commerce giant Amazon.com (AMZN) announced Aug. 27 that it’s working with Affirm Holdings (AFRM), sending its shares soaring. Amazon said it’s testing Affirm’s BNPL plans on orders of $50 or more. The e-commerce giant plans to make BNPL more broadly available in the coming months.
This is hilarious. People pretend this is some “new tech” invention. Have people never heard of rent-a-center? They are just renaming something that’s been around for decades.
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No need to be perturbed. Many things are like that. For example, fashion 
Original idea is hard. So we call “new” idea, innovation i.e. not very original. New name (BNPL) for a new generation (millennials), sound ok to me. You’re showing your age 
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I’m not at the “get off my lawn” age yet. Lol.
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I think with free money coming to an end along with the end of mortgage memorandum, we’ll see some volatility. I watched some youtube that mentioned there are more than 1.5 mil SFH that might go into foreclosure or on sale over the next few months due to this. If the personal credit is behind along with the real estate, watch out! 
so to me, this is the new subprime disaster waiting to happen. Even if people’s credit gets checked. what prevents me from doing BNPL on multiple platforms at the same time?
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Three things may be happening.
- they (BNPL People) do some kind of credit analysis of the borrower without looking at the credit report.
- keep credit small. Less moral hazard due to credit being for a specific item.
- Probably BNPL people are not taking any risk by lending. They are simply an intermediary who has no skin in the game and does not care if borrower defaults.
Where are these SFHs?
Just googled… According to MBA, it’s more like 2 mil SFHs.
Unless home is underwater, why would owner not just sell and discharge the mortgage? Prices have only appreciated in last decade. So what kind of mortgages have risk of foreclosure?
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Maybe there is more data via MBA, fannie mae, or dept of housing.
To me, the answer to what will happen to stocks, consumer purchasing power, house, etc will be simple. We’ve had a huge increase in money supply along with a mortgage relief and many options for easy loans. Free money supply is almost done (at least directly to the consumers), and same with the mortgages. Looks like credit/loan could implode at some point and likely get worse as free money supply dries up.
All leads to a massive decrease in consumer purchasing power and it will be reflected in the stock and real estate market imo. Of course, fed can print more and delay but they might run out of excuses. 
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Go full on margin for stocks and max LTV for RE.
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