Consider Buying Shares in One of the World’s Best Businesses

As we covered yesterday, Square (SQ) acquired Australian buy-now-pay-later (BNPL) company AfterPay (AFTPY) for $29 billion.

Let’s look at an example of how BNPL works:

• A customer decides to buy a pair of shoes for $100
• Instead of paying $100 upfront, BNPL companies allows the customer to pay four interest-free installments of $25 each
• If you miss a payment, you get hit with late fees and interest charges

BNPL offers an alternative to credit cards. According to research firm C+R Research, 38% of BNPL users say these services will eventually replace their credit cards. Consumers seem attracted to BNPL for the convenience, lack of hard credit checks, and (sort of) interest free financing.

While I am bullish on BNPL and am happy to have exposure via my “full” position in Square, I don’t view it...