Direct from the desk of Dane Williams.
Did you see Aussie buy now pay later (BNPL) company AfterPay’s results?
Just a cool $345 million loss.
Oh yeah, no biggy.
I’m sure Square… or wait, is Block now?
Anyway, whatever shape their new owners are calling themselves these days, I’m sure they’re just tickled pink.
Ergh, gross.
It’s almost sad watching AfterPay try to publicly sugarcoat the losses.
Spruiking them as okay because they’re simply due to operating expenses and marketing costs (lol) for the business.
But it’s these so called operating expenses that I wanted to talk about.
For AfterPay, an operating expense is someone who takes on debt because the company lets them and then doesn’t pay it back.
Buy now, pay later?
More like buy now, pay never.
Am I right?!
Something that makes me laugh is the fact that these loans end up being called bad debts.
Like the BNPL sector also has good debts?
They say they're bad debts, but this is simply what a BNPL service is...
Literally their whole business model is based on offering one type of debt to people.
Bad.
Via their favourite retail outlets, they market to millennials as a way they can get kitted out in the hottest gear even if they don’t have the cash on hand today.
Locking them into debt that they can't pay and recouping interest on the loan when they get into trouble.
Wow, what a great idea!
So a major revenue source for BNPL companies like AfterPay is to trick people that shouldn’t be taking loans into taking loans.
And then charging them interest on those loans when they inevitably get into trouble.
But the thing is, you can’t charge interest if the loans simply never get repaid.
This is exactly what we’re seeing and you’re a stone cold businessman if you are reading this and don’t have a wry little smirk forming on the side of your mouth.
Yeah, I see you!
We’re not talking bankruptable amounts here.
But obviously an absolute shitload of smaller debts not getting paid back, quickly adds up for someone like AfterPay.
Ha!
So finally we come to the big question.
Is AfterPay a scam?
Well the answer is no, because they do offer a regulated interest free loan as long as you pay it back.
Are AfterPay pieces of shit for basing an entire business around predatory lending and winning only when their customers lose?
That, I would most definitely say the answer to, is yes.
But as we very well know here in the open, unregulated crypto-sphere, morals don’t mean jack shit in the grand scheme of things.
Customers are making a personal choice to take on debt that they can’t afford.
I mean let’s not kid ourselves here..
Those who are taking up these shitty, predatory loans aren’t using AfterPay to buy bread and milk for the kids.
They’re predominantly kids buying the latest YEEZY release and the like, simply because they’re able to,
Then palming responsibility onto their future self.
I just hope the irony of a massive company offering predatory loans to the less financially savvy and then getting bent over and fucked come earnings because the loans were so predatory that they were literally unable to be repaid, is not lost.
So good.
Best of probabilities to you.
