Afterpay lures Obama's former adviser – as the professor who predicted WeWork’s collapse says its stock price could drop 50% within the year

• Buy now, pay later company Afterpay has brought in former World Bank chief economist and Obama adviser Larry Summers to advise it on its US expansion.

• Making the announcement via the Australian Securities Exchange (ASX), Afterpay said the US advisory board was made up of some of "the best minds and most reputable experts" in the world of commerce.

• It might need them after NYU Professor Scott Galloway predicted just days earlier that its share price would halve as it was cannabilised by larger competitors.

---

As it gets buffeted at home and eyes an ambitious expansion abroad, Afterpay has enlisted some seriously heavyweight help.

The buy now, pay later provider announced on Wednesday it had recruited former Obama adviser Larry Summers to its US advisory board.

"Afterpay is leading the market by reinventing the way people shop and pay with alternatives to traditional credit that encourages responsible spending and control in how consumers pay," Summers said of his appointment in a statement issued to the Australian Securities Exchange (ASX).

"I look forward to working with the leadership team to make the most of the opportunity before them."

Summers has held a host of prestigious positions through his career. He served under the Clinton administration as the US Treasury Secretary and as a key advisor under President Obama. He's also been at various times the chief economist of the World Bank and a President Emeritus of Harvard University.

He joins the newly created US advisory board as the company undergoes a serious expansionary effort in the US market, after taking off in Australia. In its first year there, Afterpay claims it is available across more than 6,500 retailers there.

"Our new US Advisory Board represents the best minds and most reputable experts in the commerce and financial technology market," co-founder Nick Molnar said. "With their support, Afterpay will continue to build on our business momentum and forge strong partnerships with brands who want to offer their customers a way to pay that encourages responsible spending, control and convenience."

Summers is joined on the board by Uli Becker, formerly an executive at both Adidas and Reebook, as well as Matthew Kaness, formerly the chief strategy officer at Urban Outfitters.

Afterpay's stock price is predicted to halve over the next year

The formation of the board comes at a critical point for the company, which faces intense competition from other buy now, pay later companies as well as established payment player Visa, US bank CitiBank and others moving into the same space.

That fierce competition hasn't seemed to hurt Afterpay's stock price thus far -- it's more than doubled in the last year. How long that lasts though remains to be seen.

Enter New York University professor Scott Galloway. He is the one who called the spectacular collapse of WeWork's planned IPO seemingly before anyone else. This week he published on YouTube a dour assessment of Afterpay, warning its share price could halve within the next 12 months.

https://www.youtube.com/watch?v=f2CdnZTlXME

So what's behind the prediction?

Well, first of all, Galloway acknowledges that -- unlike WeWork perhaps -- there is some value to the buy now, pay later space. He says this could be especially true in the US, for example, where half of all 30-year-olds make less than their parents did, citing data from The Equality of Opportunity Project. Meanwhile, three-fifths of millennials are interested in instalments for larger purchases, according to a Visa report.

Well, Galloway claims there's simply not enough 'moats' -- competitive advantages to see off competition -- to hold on to and grow that market. Particularly as established heavyweights like Visa and Mastercard begin to throw their weight around.

What it has instead are 'puddles' -- or in other words, an easily breached head start. For Galloway, that means Afterpay simply can't justify trading at 37 times its revenue. At the same time, Afterpay is subject to an ongoing money-laundering investigation at home in Australia and its co-founder David Hancock announced his departure from the company on Wednesday, with $99 million worth of stock options in tow.

During such a busy time for the company, you would imagine Summers can't start soon enough.