Afterpay Limited
Thesis
Afterpay has shown significant traction in the U.S. market, expanding rapidly and gaining a large customer base. The company's unique positioning in the fashion sector, where consumers often browse and discover products, allows it to capture a larger share of the purchasing funnel compared to competitors. The potential for U.S. consumers to adopt Afterpay at similar rates as Australian consumers presents a substantial growth opportunity.
Did it work?
Over the 80 months since the pitch, the long position returned -86.6%, a decisive loss that overwhelms the thesis's genuine successes — Afterpay did scale rapidly in the U.S. and was ultimately acquired by Block, but the growth story was priced in at peak BNPL valuations. The subsequent derating of the BNPL sector and the collapse in the value of the merged entity's shares swamped the fundamental adoption narrative, so the investment did not play out for the investor. With far more than any reasonable stated horizon elapsed and a deeply negative return against a long direction, the thesis failed.