Doubling my $600,000 Investment in THIS Stock

hey everyone me kevin here let's talk

about a firm a firm just destroyed

earnings today absolutely crushed it the

stock is up 20 in after hours i've got

600 000 invested into this stock and

even though i hedged my position in this

stock i am jumping up and down because

this is such a phenomenal company and i

could not be more excited with what

happened here so first what i'm going to

do is i'm going to give you a quick

synopsis of what a firm is i've already

done a very detailed video on why i'm

investing in a firm so i'm not going to

rehash all of that i'm going to give you

a quick little synopsis i'm going to

talk about what happened with earnings

today what changed for the future

and what my position is now going

forward as an investor am i going to

make any changes what's my perspective

what am i going to do okay ready let's

go first a firm is a buy now pay later

platform basically it's trying to

replace your usage of a credit card now

i'm gonna preface my explanation of a

firm by saying i personally think

anytime you buy something you should pay

it off the same month you buy it you

should not buy an ipad and then buy it

and pay later for it i think you should

pay it off in the same month you buy it

the same thing with a peloton the same

thing with really anything but real

estate the only thing i want to see you

making payments on is real estate okay

that is from me from a personal finance

perspective okay now i'm gonna take away

or sort of put on a shelf my own belief

of what you should do with your personal

finances and now we're gonna put our

investor hat on and look at a company

that's making a ton of money a killing

in terms of money by offering people a

more more affordable option than a

credit card and that's called buy now

pay later so for example if you want to

buy an amazon fire tv in the future

since the firm just announced a

partnership with amazon which is

currently in the testing phase we don't

have a lot of details about it and

that's part of the crazy part is a firm

is skyrocketing without even having any

revenue projections on the affirm amazon

partnership which is nuts but anyway

let's say you want to buy a new amazon

tv 500 bucks hey do you want to pay that

500 now on a credit card and potentially

pay 20 interest on your credit card or

would you rather make monthly payments

or payment every two weeks for 25

or 12 dollars and 50 cents and just make

those payments for you know 20 periods

or 40 periods or whatever spread your

purchase out over multiple monthly

installments for absolutely zero

interest well a lot of people are gonna

go uh yeah sure sign me up for that zero

interest as long as i make those

payments i can have that new tv let's go

what's gonna happen amazon sales are

gonna go up my expectation people are

gonna spend way more money this is why

on the personal finance side of things i

think it's a very very bad idea to do

this because you're going to spend way

more money but from an investor point of

view i'm like oh my gosh

people are going to spend more money on

amazon amazon's growth is going to go up

and a firm is going to partner in that

growth a firm is like a cheap way

to get your hands on growth at amazon

and we're going to talk about moats and

competition in a moment but i've been

wanting to get my hands on amazon growth

for a very long time but the problem is

it's like a trillion dollar plus company

and it's kind of like a goliath like law

of large numbers makes it really hard to

move a firm is a 24 billion dollar

company in the grand scheme of things

it's still half the cost of coinbase

okay and coinbase ain't even doing that

hot right now

so

i'm very very excited about a firm i'm

so overly excited one of the folks who

works with me says kevin i've not seen

you this excited about stock a stock

since tesla and that's kind of because

in my opinion this is the tesla of

finance uh and and like even more so

than sofi or the other companies that

that i'll like sell puts to get into or

whatever this is something where i'm

like no no i really really really like

this this is great now why why do i like

it well again

the reason i think people are going to

go nuts for using this service is

because as long as you make the timely

payments that is you agree to make 20

monthly payments to to pay something off

and you don't need an extension you

don't pay any interest it's super

transparent about that you don't pay

interest if you make your payments which

is awesome that's going to make more

people sign up for this people pay

interest if they need more time or

extensions and there are no late fees

but then you pay interest if you need

more time right

if for whatever reason

uh you pay it off you don't pay any

interest so it's a win-win for you but

it's also a win for a firm because

rather than your credit card taking that

2.9 processing fee every time you swipe

your card a firm takes that processing

fee so a firm makes money off the

transaction upfront

and then if you pay interest in the

future they'll make money off that

interest if you end up needing to pay

interest those are their two primary

sources of revenue but one of the

reasons i call them the tesla finance is

they just recently announced an affirm

savings account and all they did was do

a little

on their app they're the affirm app and

they got 600 million dollars in savings

account deposits and i'm like

whoa

okay they spent literally zero dollars

and got a ton

of savings deposits hold on let me just

make sure really quickly that was six oh

i'm sorry 300 million i overstated that

a little bit and then i started thinking

about it in my head i'm like wait a

minute that was that was the wrong

number sorry 300 million dollars in

deposits sorry about that but anyway 300

million dollars of deposits and they

spent zero dollars in advertising that's

like tesla it's crazy but what's also

crazy is their future projections for

new products so consider this i went

into their earnings call and i read

through their earnings called transcript

and what they really want to do is they

want to get people off of ever using

credit cards they call this a credit

card alternate which people in general

don't like credit cards credit cards

have a bad reputation now a lot of us on

youtube are like ah but you can get your

credit card rewards points whatever most

people in society don't think credit

cards are a good thing now the downside

is it's kind of like you're signing up

for a reverse debt snowball because

you're just building up more and more

debt and you're probably likely to spend

more money but that's a personal finance

problem that's not a firm problem right

so like this to me makes me want to use

a firm to sell for example my courses

linked in the description down below

like you if you check out through paypal

on my courses you can make payments over

like four monthly payments or you can

make installment payments with paypal

but i really wanna firm because if you

could use that forty percent off coupon

code that's expiring on september 24th

and

use that coupon code to get hundreds of

dollars off the courses link down below

on building your wealth and pay off that

over 24 payments instead of four

payments like with paypal that's awesome

like i really want a firm

this is great so i think every

merchant's going to want to use a firm

and we're seeing merchant numbers

explode at a firm it's really really

cool but this is really cool what

they're saying here look at this the

next frontier at a firm

is the unbundling of daily spend

including groceries restaurants and

incidental

purchase purchases excuse me like they

literally want you to have an affirm

debit plus card to where when you make

transactions you can link your bank

account to this card and you could

choose do i just want to pay it in full

now or do i want to buy now pay later

whatever transaction like i could

literally see people going to a fancy

restaurant a couple hundred bucks i

don't know uh go to the

lure fish house or whatever and get

yourself a bottle of wine or whatever

right and then make payments on that

dinner over like 18

installments like

what it's it's again personal finance

wise horrible company wise this is

insanely brilliant because you could

just put everything on your firm card

and then go on the app and go yeah i'll

buy now pay later that okay i'll pay

that in full now i'll pay later that

i'll pay later that i'll pay later that

and it's just like

that has not even been priced in yet

because they're just now testing this

app and this in my opinion it and

they're just now coming out with this

credit card this in my opinion is not

even considered by wall street right now

it's totally insane i'm so so so so

excited uh about a firm i i gotta i

gotta

dampen my expectations a little bit here

because i'm too excited but let's do

this

i gave you a little bit of an overview

of a firm here and some crazy things

going on let's now look at numbers

really quickly and then let's look at

the future but i'm going to keep numbers

brief and basic because

numbers get boring really easily okay

all right so first it's worth noting

that only seven

only nine percent of a firm's revenue

actually came from pay uh from peloton

uh this quarter which is really good

because everybody originally saw a firm

as just a peloton company but it's much

more than that in fact if you look at

their product mix right now they

literally do a bit of everything which

is really good look at this fashion

beauty sporting goods equipment other

home lifestyle travel ticketing

electronics look at this pie chart like

this is a very very very nicely

diversified pie chart i really like this

and then in terms of the actual

transactions

38 of the transactions that they're

doing right now are zero percent

interest which most of them start at

zero percent interest but if you need to

extend uh they go into interest bearing

there are also cases where i believe if

if your credit doesn't meet the

requirement for zero percent i believe

you could also be uh you know

have an interest bearing account or an

interest bearing loan

but uh i have not gone through that

process myself because my credit is

frozen and i can't sign up for the darn

offer map i gotta unfreeze my credit i

highly recommend you freeze your credit

if you type into youtube meet kevin

credit freeze you'll learn all about it

it's highly important very very safe

thing to do uh and it's free to do well

in california it's free to do in some

states it costs ten dollars per bureau

to do it and then ten dollars again to

unlock

watch the video uh but anyway the

what's really really exciting is not so

much the numbers this quarter because

the numbers this quarter

came in decently look revenue beat

expectations it came in at 261.8 million

versus the 226 million expected so you

had a beat on revenue loss came in a

little larger than expected at 48 cents

per share versus 29 cents expected and

that initially led the stock to actually

go down

but when people realized that the loss

was only wider than expected because of

stock-based compensation which is like

paying their employees like a one-time

kind of bonus or whatever uh the stocks

skyrocketed it went up 20

and the reason for that is

they went from 11 500 merchants in

quarter one to 29 000 merchants in q2

that's almost a 3x that's insane

they are the provider for shop pay which

is a shopify the shopify network if

people want to check out with shop pay a

firm does that it's branded as shot pay

but a firm does that their transactions

per active customer are flat from q1 but

a year over they're up from two

transactions per customer to 2.3 and

once they roll out that debit plus card

i expect this to go to like five on

average i think this is gonna double

people are gonna get addicted to using

this i think it's gonna be very bad for

people's personal finances

but in terms of like and there's like

this a little bit of like that ethical

balance but like people who are going to

borrow like that i personally think are

better off borrowing with a firm than

using a credit card so i think if

anything that might be a justification

for saying like that's okay a firm's

okay but look this is gonna be dangerous

for people people are to load themselves

up with so many monthly payments it's

going to be nuts again personally don't

recommend that but i also don't

recommend buying a tesla and i'm a big

investor in tesla that's because i don't

think you should waste your money on a

stupid car but people are going to do it

anyway like i keep seeing all these

instagram posts of like really young

people who finally just got their first

thirty thousand dollars and they blow it

all on a tesla model three and i'm like

should've bought the stock instead but

whatever whatever anyway

uh they're active customers

they literally exploded exploded in q2

they had a 31.4 gain they went from 5.4

million monthly active users to 7.1

their gross uh merchandise volume didn't

go up that much it went up from

2.3 to 2.5 billion

which works out to about 8.6

we are seeing average ticket volume come

down which is actually a good thing

because you don't want a firm to only be

considered that thing you use for high

ticket purchases like a peloton bike you

want it to be like your everyday driver

like oh 100 bucks let me divide that

into 10 interest repayments right that's

really what you want to see a firm

because you want a firm to have more

transactions you want a firm to be used

for like everything there was a survey

that was reported in cnbc where they

mentioned that

they did a survey and asked amazon users

hey would you use a firm for your amazon

purchases and 20 of people who responded

said they were very likely to use it and

combined 50 percent of people said they

were very likely or likely to use a firm

in the survey that's because there is no

buy now paid later option right now with

amazon you could just have the credit

card uh gift card or bank account that

you can pay through and amazon tends to

keep their checkout process pretty

simplified to where i would not expect

them to have multiple different by now

pay later vendors i think they're going

to test this which is what they're doing

now negotiate a deal with amazon and the

gross merchandise revenue that or volume

that a firm processes is literally just

going to

explode it's going to be insane i'm very

excited about this in my first video

where i broke down the firm financials i

mentioned that amazon okay get this okay

amazon well let me give you a better

comparison first peloton sold like 600

million dollars in bikes in the last

quarter about a billion dollars in bikes

in the first quarter

walmart has online sales of around 13

billion dollars per quarter okay so just

combined that's like 14 billion dollars

just walmart and peloton right

amazon does

54

billion

54 billion that's like 4x in quarterly

rev and that was just last quarter

that's not even like the holiday season

like this is insane and this is going to

ramp up for the holiday season okay like

i

am jumping up and down over this company

so those give you some of the numbers in

terms of why the numbers are so exciting

right now and none of their forecasts

which their forecasts are just

mind-blowing very very good forecasting

numbers none of their forecasts at this

point include any kind of growth

expected

on uh on amazon and they are expecting

in fiscal year 2022 which starts now

actually they go from july to july messy

calendar but anyway

their expected year-over-year gross

merchandise uh value

they're expecting a growth of 50

based on forecasting not including

amazon which is just like

they are growing

insanely this is why i threw 600 000

into this company now i'm going to talk

about my hedge in just a moment but i

want to say this is very very good

they're uh they're advertising revenue

oh yeah this was interesting their

amount of advertising not advertising

revenue but the amount of advertising

that they spent

that was slightly up

uh but oh here you go they increase

their marketing spend their sales and

marketing spend by six percent

per quarter so quarter over quarter they

spent six percent more on marketing but

they doubled their revenue which is

really good like what you don't want to

see is like a 30 increase in

advertising and a 10 increase in revenue

right that would be really bad return

they're doubling right now just

we want to make sure that's sustainable

but this is very very very good going

through the rest of their earnings call

notes they mentioned they're really in

the early stages of their partnership

with amazon they're still testing they

expect peloton to moderate in terms of

sales i have 100 sold out of peloton i

sold out of 98 of my shares before their

last earnings when they fell i sold the

rest today because they had soared a

little bit

and the reason for that is uh price is

going down sales going down before even

this earnings call we already knew their

sales were going down uh before the

peloton earnings we knew their sales

were going down their website traffic's

down their search trends are down like

everything's down i'm not saying

palatal's not a good company but they're

very pricey for growth that they're

losing right now coming out of this

pandemic and i'd way rather throw all my

money into a firm like this is very very

very exciting to me

they're still testing with uh amazon so

there's still some work to do i think

they're gonna have a moat with amazon

because i don't think amazon's gonna

bring anybody else in and i don't think

that amazon is going to replace a firm

if anything they would just buy a firm

out but i don't think they want to be in

finance quite frankly that's why they've

been outsourcing again they brand

themselves as being the replacement for

credit cards and now i'm going to talk

now that we've kind of gone through

uh sort of an intro in terms of what's

going on we've gone through how they

work the numbers

projections for the company in terms of

growth we're expecting let me now just

touch on my game plan for the company

then we're going to wrap this up all

right so my game plan

right now

easiest thing to do honestly is just

pull it up i have a couple options

contracts on this which are not going to

do very well

but i have a ton of shares on this so

i'm going to show you what i have

okay so let's pull up a firm right here

there we go okay perfect so we're gonna

throw this up on screen so you can see

exactly i'm a big fan of being a hundred

percent transparent with my audience

so this is just my weeble account right

here so at the very top you're gonna see

i bought a

dave buster's call option you're going

to see that right

here

ish if i can figure out how to place my

hand right there that's going to print

attendees tomorrow that's 30 thousand

dollars it's already up five grand

tomorrow when the market opens because

the stock's up like six percent this is

probably gonna be up like fifteen

thousand dollars in total which is great

because i'm going to lose a lot of money

right here on these two things i have a

firm covered stock and then a firm put i

know why would i have a firm put because

i was hedging i hedged my position on a

firm because i

swore to myself people are going to be

overly optimistic about the amazon

revenue and we're not going to have any

amazon revenue here yet they're probably

not going to talk about amazon revenue

and i was right they barely talked about

amazon they said no guidance on amazon

still testing amazon no details on

amazon but even without amazon they

crushed it they totally crushed it so my

hedge options here are going to lose

money tomorrow uh a lot of money uh i

expect this where is it uh see this 29

000

uh put right here i expect that to uh

probably be negative twenty thousand

dollars tomorrow and i expect my covered

call right here instead of being

positive twenty two thousand dollars to

probably be

negative twenty thousand dollars or at

least negative ten thousand dollars or

something like that so i expect to be

down somewhere around 20

to

40 000 tomorrow on my affirm contracts

uh i'll be up about 15 on my uh dave

buster's contract

but look at the stock and the stock has

already updated because of after hours

the stock's up 107 grand

that's amazing and a lot of that here

and after hours

so the stock is up to is up 107 000

a ton of that up right now and uh look

i'll take a hundred grand and then shave

you know 20 or 30 or even 40 off as part

of my hedge that just didn't work the

put and the call they didn't work so i

don't mind closing those out now if i

get exercised on the call that'd be best

case scenario but they're not going to

do that that would be stupid because

they'd give up all their extrinsic value

so what i am planning to do is i'm

planning to

tomorrow see if we get any kind of drop

in this 20 gain on a firm stock

and if the stock goes down at all i'll

close my options i'll just ta i'll close

my options at that point it's possible

some enthusiasm will wear off by monday

and maybe the stock drops more close out

the options then it is however also

possible that a firm just stabilizes and

strengthens because personally i'm very

excited about a firm i don't really care

that my hedge didn't work because the

stock did great like i am way up on the

actual stock on weeble here and i'm

going to throw more money at this

company i would be willing to take uh

the other cash balance that i have in

uh

probably an m1 finance i've got about

300 000 over m1 finance and then i've

got a cash balance of about 200 000 at

weeble i'm willing to take that and

potentially just throw it into a firm

and just buy and hold all this stock

this is not a stock that i really want

to play options with anymore i i

hedged my position

shouldn't have done it but that's just

the nature of hedging hedging look if

the stock went down i would have lost a

bunch of money on the shares but i would

have printed attendees on the options

right the stock went up i'm making more

money net net so it's still a win-win

i'm very bullish on the stock i was just

not excited about this earnings i

thought this earnings would have been

bad i was wrong so i recognize i make

mistakes sometimes but uh hey

big scheme of things this is best case

scenario the company that i went really

heavy on is crushing it i am up on my

position like really nicely up in my

position and i want to make this one of

my top five stocks i'm very excited here

i really hope i'm not getting too

emotionally involved i don't think i am

because if i was so emotionally involved

i wouldn't have hedged this stock in the

first place because i would just be like

oh no i'm all in on that stock right i

just wouldn't have hedged it like i try

to be reasonable with my investments to

kind of protect from both sides

again in this case best case scenario

happened i made more money this the

company i believed in so much is doing

very very well

uh i just like tampering or sort of

tempering my my enthusiasm but by also

taking advantage of hey if i could sell

a call and make some money then i'll do

that so we'll see what happens in the

stock i'm really gonna monitor this over

the next few weeks i am tempted to

potentially just buy say a hundred

hundred fifty thousand dollars tomorrow

just to increase my share position a

little bit and maybe if it dips next

week or in the next few weeks if we get

dips especially if we get back under 100

just kind of keep bumping this position

so i could get this position to a seven

figure position because what we heard

today very excited very very excited

about this company long run uh i'm more

excited about this than any company that

i've been excited about with the

exception of hippo we got pretty excited

about hippo that's done very very very

well too like the last

few big plays have just been absolutely

phenomenal so very excited as usual if

you want to know all of my trades

everything i'm doing all my hedges

everything i'm doing with options crypto

whatever join stocks and psychology

money link down below use that coupon

code and folks we'll see you next week

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