So the merge is all legal now and will go ahead this month.

Please remember, the default is to receive ASX listed CDIs. You only need to do something if you want cash or Block NYSE listed shares.

Trading in AfterPay shares suspended from trading 19 Jan. I assume this is at the end of the trading day.

Deferred trading of CDIs (ticker SQ2) commences on 20 Jan.

Holding statements will be issued on 2 Feb 2022. Interestingly that’s 2/2/22. I hope they get issued at 2:22pm.:)

This from the scheme booklet.

I felt somewhat unclean today as I used PayPal’s pay-in-4 for an online purchase. I had reached my $2000 AfterPay limit so was going to use PayPal anyway, so thought it presented an opportunity to see how Pay-in-4 compared to AfterPay. Plus I do also hold shares in PayPal so I felt I was still supporting a company I invest in. I do like doing that!

The transaction was brilliantly simple, and seamless. I just had to check a box. And since this purchase was made at a time that was very close to the end-of-current-month debt reconciliation period for my credit card, I appreciated spreading the debt into future months and having about 100 days to pay it off.

PayPal (as is also the case with AfterPay) gave clear guidance on the value of future payments and when they will be automatically taken out of my credit card.

Paypal sent me an email when the first payment came out. My AfterPay experience is superior in this respect as they notify me BEFORE payments come out of my credit card, and this notification is more noticeable as I receive both an email and an SMS text message. Not a huge difference, just slightly better IMHO.

So that was all very positive, which may bode poorly for AfterPay. But I think AfterPay still has an important edge, as discussed below.

I did notice that the PayPal pay-in-4 process had EVERY BAD element that has ever been thrown up at AfterPay, and with one in particular that could see PayPal in hot water.

- no credit checks

- no limit as far as I could tell

- this really should be considered as offering a credit service

- made it easier to spend money, and hence create a debt

The ‘no limit’ one is what I think may get them in hot water.

AfterPay addresses concerns of debt creation, and in particular runaway debt, by limiting the total of all transactions to a max total outstanding debt of $2000. And users build up to that level by using the service with a greatly reduced max limit ($250) until they prove they can pay off their debts. This is the cost effective way AfterPay does credit checks, and it wears the cost of bad debt while users are building their trust level.

While PayPal, pay-in-4, does not seem to address total level of indebtedness at all, nor does it place limits on first-time usage, Hence I believe PayPal pay-in-4 provides a process that could make runaway debt a real possibility. It also may make it possible to exceed credit card limits, as I saw no checks made BEFORE money was taken from my credit card. And although this is a problem with PayPal in general, it seems to be exacerbated by their pay-in-4 offering as it makes it seem that you are paying less and could stress your credit card for the future 2 months placing users in credit card stress and subsequent runaway debt and high interest charges by the credit card provider.

This article is worth a read, if only to know what one reasonably-sized fund is thinking of the merger. Heads up, they like it.

From disappointment to delight: Why Hyperion's holding its Afterpay shares tight

Some key takeaways (quotes from the article) include:

• There's not a better synergy or better combination of companies, particularly in Fintech or payments globally than Square and Afterpay.
• Square's forecast internal rate of return is actually higher than Afterpay's.
• So really an acquisition like this is really future-proofing yourself against disruption to the standard financial system, and getting on the wave with that younger generation.
• It does de-risk the investment in Afterpay, which is a single product company, whereas Square's a lot more established with more products. 

DISC: as with Hyperion, AfterPay is my largest real world holding and I don't intend to sell any. Square has a long term CAGR in triple digits. If it only achieved half of that this year, the real value of the merge will be more like $200 per AfterPay share. I'm looking forward to increase my holding in Square.
 

I think people/the market are forgetting that AfterPay and Apple are already working together.

AfterPay with ApplePay

So it might not actually be a fight between PayPal, Apple, and AfterPay. It might actually be a fight of Apple (with AfterPay) against PayPal. That seems a much fairer fight and may not see AfterPay as collateral damage.

Afterpay’s banking move turbocharges valuation debate

With valuations ranging from $37 to $149 by the "experts", it just goes to show how little advice such things are.

Only one thing is certain. AfterPay is expanding which, by definition, must negate any bear arguments.

AfterPay continuing to grow in the US by partnering up. It's the way to get things done in the US.

The-Container-Store-and-Afterpay-Partner-to-Deliver-Flexible-Payments

AfterPay hinting at moving into SME lending. That could be interesting and open up an area for growth.

Some points in this article indicate it might be a bad thing, but then where else did AfterPay have potential to grow?

afterpay-hints-sme-lending