Broken Moats
Family-Office Long/Short Research, Variant Perception
Remitly's moat is eroding as Stripe cuts prices and offers remittance in 100 countries, eliminating the barriers of legal jurisdictions, banking laws and KYC. Stripe can now push the service itself rather than only supply rails, and a possible Remitly stablecoin partnership with Stripe uses a pipe open to anyone. Lower barriers erode pricing and raise marketing costs and churn, shrinking terminal value; only the market's melt-up mode is keeping this news from hitting the stock. x.comÂ
Remitly's price does not adequately reflect the threat from Stripe's remittance announcement after the stock nearly doubled in recent months. Standalone remittance companies resemble point SaaS solutions, and the business side is a big part of Remitly's pitch. Oddly, the remittance companies have not responded to Stripe's move. x.comÂ
Stripe's work with Plasma on stablecoin-backed cards makes the stablecoin supercycle look absolutely massive for Plasma. Stripe says it is combining fiat and crypto infrastructure to make it easier for businesses to build cards that work across currencies and markets. x.comÂ
Growing stablecoin payments and business adoption position Visa, Mastercard, Coinbase, Circle and PayPal for a massive shift in global payments. Stablecoins are moving from crypto speculation into real-world financial infrastructure; payments reached $482B year to date, up 45%. Autonomous AI-agent transactions may be the next frontier. x.comÂ
Remitly is still cheap for a secular grower at about 13 times 2028 EV to free cash flow, despite falling after a great quarter. Q1 revenue grew 25% to $453 million on 37% higher send volume, adjusted EBITDA hit a record $102 million at about a 22% margin, free cash flow topped $70 million, and stock-based pay fell to 6% of revenue. It can sustain about 22% revenue growth through 2028 while scaling to roughly 25% EBITDA margins, with optionality from adjacent services. x.comÂ
Circle investors significantly underestimate the risk that leading fintech players team up to launch their own stablecoin. Stripe alone holds an estimated $15-25 billion of float at any time from its transaction volume, equal to 20-25% of USDC's supply, without even actively growing it. x.comÂ
Circle faces pricing pressure because stablecoin infrastructure has low barriers to entry, which is why it stays an underweight with only small exposure. The risk showed when Circle fell 13% as Stripe, Coinbase and BlackRock backed a rival stablecoin, Open USD. x.com x.comÂ
Remittance providers such as Remitly and Wise are long-term winners because immigration will keep gaining momentum. Birth rates in many Western countries are below replacement, so labor needs will drive migration even amid rising nationalism. Germany, for example, is turning to India to fill worker shortages, per the BBC. x.comÂ
PayPal should hold a floor now that Stripe's dropped $60.50 offer put a value on it, making a return to the $30s unlikely. The very lows should be the low to mid $40s; with nearly 500 million global daily active users, it looks too cheap for an acquirer to pass up, and it could make Elon Musk's X a force. Without more takeover talks, though, it could bleed lower to fill the gap toward its $47 pre-bid price. x.com x.comÂ
Mastercard benefits as cash payments keep moving to cards worldwide, making it a five-year buy at today's valuation. It keeps about 60 cents of each revenue dollar as operating profit; revenue grew 14% and EPS 21% last quarter. Stablecoins and bank-to-bank apps could bypass the network, but stablecoins might instead drive growth. x.comÂ
PayPal is a low-switching-cost, low-moat business headed for secular decline as payment fees race to the bottom. In 2021 it wanted to buy Pinterest for $45B; now Stripe reportedly wants to buy it for $53B. Stripe is probably the best suitor by far, as a good tuck-in acquisition. x.com x.comÂ
Stripe's Bridge launching USDsui plugs Sui into payment distribution rails, a payment thesis the market is underpricing. Sui's sub-second finality, parallel execution, object-centric state and low-latency stablecoin transfers make it payment-grade infrastructure, not just a fast chain. Payments create recurring demand from merchant settlement, cross-border flows, wallet balances and embedded finance rather than mercenary TVL, and Stripe owns one of the internet's largest distribution surfaces. … Show more
