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Jul 12, 2022Liked by Doug Clinton

As usual, I like your use of clear models, reasonable assumptions, and accessible math, w.r.t. Klarna. And as usual, I'd like to add a comment. Does the company have a moat, as in IP but also the talent to increase the moat? With a moat, one can assign some probability to achieving such high growth and margin rates. Without a moat, its fantasy, borderline fraud. Harsh? Not really. 25% FCF means the company has something that people must have and cannot get elsewhere. That kind of margin power requires IP or decades worth of brand equity.

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I think there's arguably a moat in the merchant network. Consumer side moat feels more questionable. The moat is not as deep as V or MA though.

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