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ThinkSmart (TSL), which is trading well below the value of its assets after accounting for all liabilities
Investors in Aim-traded finance company ThinkSmart (TSL:79p) have overreacted to the UK financial regulator’s recommendation that'buy now, pay later' (BNPL) credit deals offered by internet retailers should be covered by its rules. It’s actually good news for BNPL fintech companies such as Klarna, Paypal and Clearpay, which take a commission from the online retailer to fund a customer’s retail purchase and then collect the full purchase amount from the customer through more manageable interest-free payments.

The finances of 5m consumers in the UK who opted to use BNPL finance to make £2.7bn of online purchases since the start of the Covid-19 pandemic will be subjected to greater scrutiny in future, albeit it could take 12 months for UK legislation to be passed. BNPL finance agreements don’t currently show up on hard credit searches, which has enabled some over indebted consumers to take out multiple short-term credit agreements with different fintech finance providers. Clearly this increases the risk of them defaulting. By regulating the sector, the default rate will diminish. This can only be good for both consumers and BNPL companies. Moreover, tighter regulation creates a compliance requirement and a barrier for new BNPL funders, so should act to protect market share of reputable operators such as Clearpay.

This helps explain why the stock price of Afterpay Touch (Aus:APT), a A$43bn (£23.9bn) market capitalisation Australian Stock Exchange-listed technology group that owns 90 per cent of Clearpay, has risen by 11 per cent to a record high of A$151 following the Financial Conduct Authority’s recommendation. However, ThinkSmart’s share price has fallen 5 per cent even though the company’s 10 per cent (6.5 per cent fully diluted) stake in Clearpay is subject to call/put arrangement between the two parties, the agreed principle in determining the valuation being Afterpay’s market capitalisation. Effectively, ThinkSmart’s shares are trading on a 42 per cent discount to the 125p-a-share read-through value of the Clearpay stake (after applying a liquidity discount) and 10p a share of the company’s other net assets.

As the dust settles, and Clearpay continues to deliver its explosive growth – there is no reason for consumers to stop using BNPL interest-free finance at the point of sale just as they will continue to use credit cards offering interest-free purchases – I fully expect ThinkSmart’s shares to recover the lost ground and make significant new highs above 88.5p, too.

https://twitter.com/surprised_trade/status/1358402789005754378

new global production started, increased order book demand already out stripping supply, new products launching, global IP +set to be profitable. IF a Tesla deal is agreed all bets off as to potential mcap and sp, it'll be much higher, a lot to look forward too

https://twitter.com/surprised_trade/status/1357756966123282435

Epishine & CPX have cracked how to print solar panel tech into newsprint/film thin cells.....CPX have the thinnest supercapacitors worldwide and the IP.....look who's excited below in respone to tweets highlighting this earlier

https://twitter.com/epishine/status/1357735524748955649

along with Epishine the two companies have cracked how to print solar panel tech into newsprint/film thin cells.....CPX have the thinnest supercapacitors worldwide and the IP..
Epishine @epishine
We are very excited!

good spot MW, only just seen it myself :-)

https://twitter.com/surprised_trade/status/1357756966123282435

Epishine & CPX have cracked how to print solar panel tech into newsprint/film thin cells.....CPX have the thinnest supercapacitors worldwide and the IP.....look who's excited below in respone to tweets highlighting this earlier today

still in pursuit from my understanding, in the tangled web of Ioxus attempt to dodge paying CPX $4,950,869.48....a nice bonus when it lands to add to the progress CPX are making on all fronts :-)

yup chas, no coincidences on Aim.....it's been a slow mover after the initial jump to 46p+, however, with the uk fund taking 4%, the consistent decent loading PTRO is primed for a jump up to reflect the improved trading set up etc....

seriously TD credit to you for pointing us all in the right direction, fabulous find and CPX are in the right place at the right time as the uses are huge across IOT etc etc .. :-)

yup, you can see from the link copied in the tweet below from jeff colton's (cpx) linkedin page that not only have cps been liking the launch of this new product he has posted the details of how CPX enable it to work.....being able to print solar panels newsprint thin has been an aim of the industry for a long time, as you can see from the 2nd photo in the tweet below, so a ground breaking moment it seems and CPX seem fully involved with our global tech and IP again :-)

https://twitter.com/surprised_trade/status/1357596881874993152

Epishine will power your iot wearable and medical devices with highly effective indoor solar cells. CAP-XX ultra thin board mounded supercapacitors enable this technology and eliminate the need for #batteries by offering high charge efficiency, high energy density energy storage.

https://twitter.com/surprised_trade/status/1357615803458289668

.along with Epishine the two companies have cracked how to print solar panel tech into newsprint/film thin cells.....CPX have the thinnest supercapacitors worldwide and the IP....first products launced 2 days ago...

https://twitter.com/doit4thetwins/status/1357604442145718272

New highs for afterpay. #TSL ~ that silly drop on incorrectly perceived news proved a nice opp indeed aud 151

Excellent find TD.......and to support this fab new product, ESG initiative and exciting new business for CPX I found this link from your post.....that will be a nice RNS when it comes out and a new and importantly unique business for CPX as the worlds thinnest sc producer , excellent :-)

Epishine new product launch release webinar
Epishine will power your iot wearable and medical devices with highly effective indoor solar cells. CAP-XX ultra thin board mounded supercapacitors enable this technology and eliminate the need for #batteries by offering high charge efficiency, high energy density energy storage.

https://twitter.com/surprised_trade/status/1357596881874993152

not RNS'd yet, new global business for CPX in the ESG energy harvesting sector, Indoor solar panels.

https://twitter.com/surprised_trade/status/1357266066209177602

bouncing back after irrational sell off yesterday on improved regulations that will benefit TSL stake in Clearpay/Afterpay

..and After Pay share price up at aussie close this morning to aud 146 :-)

https://twitter.com/surprised_trade/status/1357025984072007684

.bounced up from touching 9p...fundamentals suggest a challenge on 14p+ and a move higher, witchcraft tech stuff does too
(see chart)

one other point, the review on regs has been on going since September 2020, so for me and the industry it was expected news and I'm sure most involved see it as beneficial..anyway short term disruption, shares are cheaper, valuation on simple maths TSL stake in AP if cashed up today is closer to 130p :-)

Hi Scout, good point if you are going to panic be first, lol, however, my pain threshold is no better than anyone else's..The fact that some wish to sell out on subtle regulation changes that have mostly been introduced already in Australia (Afterpay) and it was requested by the likes of Clearpay to ensure better sustainable business for both retailers and customers is a surprise to me. It will prevent any cowboy losing the industry millions of pounds and protect both legitimate business and customer alike, it's not onerous and the principles and operation will be the same. Why some feel that an unregulated sector would benefit are hard eearned investment does baffle me as this will actually benefit Clearpay /TSL and investors..After pay shares held at aud144 , that seems like a big clue alone :-)

https://twitter.com/surprised_trade/status/1356909421612462080

some folk still selling on the fact that Clearpay welcomed & asked for better regulation to prevent cowboy operators losing the industry £'s Subtle regulation changes will only add extra value .TSL value in sister Afterpay remain near all time highs (there's the clue)

https://twitter.com/surprised_trade/status/1356892291538046976

value anomaly to 130p existed when sp was 85p Monday, greater value now with a misjudged sell off Tuesday in UK, ..added to holding today at 73p as Afterpay shares are simply worth over 100p to TSL

https://twitter.com/surprised_trade/status/1356880995719536642

added to holding at 73p...huge value gap now and UK sell off yesterday out of sync with value....IC has target of 128p+

Why is the Afterpay share price pushing higher?

Investors have been buying the company’s shares for a couple of reasons on Wednesday.

One is another very strong night of trade on Wall Street’s Nasdaq index. The technology-focused index jumped 1.6% higher overnight after investor sentiment improved as GameStop trading started to fizzle out.

Also giving its shares a lift was the release of an update on its UK-based Clearpay business. This was in response to the Woolard Review proposal, which is aiming to bring the buy now pay later (BNPL) industry under Financial Conduct Authority (FCA) oversight with proportionate regulation.

The uk sell off yesterday (Tuesday) was out of sync with the situation in Aus and the shares of Afterpay closed at closed at aud 144, providing a clear read through value gap to TSL share price.

nt to buy as an even bigger value gap exits :-)

https://www.fool.com.au/2021/02/03/why-the-afterpay-asxapt-share-price-is-pushing-higher-again/

“It has always been Clearpay’s view that consumers will be best served by products designed with strong safeguards and appropriate industry regulation with oversight from the FCA. We are pleased that many of the suggestions we put forward in our submission to the Woolard review have been acknowledged and that the review has recognised the diverse nature of the industry,” he added.

Afterpay has faced this sort of review previously in Australia and came out on top. Investors will no doubt be optimistic it will be a similar story in the UK.

https://www.fool.com.au/2021/02/01/on-fire-2-reasons-why-the-afterpay-asxapt-share-price-rocketed-12-in-january/

https://www.fool.com.au/2021/02/03/why-the-afterpay-asxapt-share-price-is-pushing-higher-again/