# Guinea Value's Jingshu Zhang on Fiserv $FISV Yet Another Value Podcast · 2026-04-10 · 64 min · https://www.youtube.com/watch?v=_ZAeAFoV6Ec ## Transcript Andrew Walker You're about to listen to the Yet Another Value podcast with your host, me, Andrew Walker. Today we've got Shoe from Gini Value back on the podcast. This is his second time on. The first time was It must have been back in October. You know, memory starts to fail you after a while, but it was sometime late last year. He came on, we talked EDU, and it was just fantastic. I I told him I sometimes point to people as the, you know, it's I'm not saying it's the best podcast I've ever done, but it's the exact type of podcast I like to do. Shoe has done deep research on the company. He brings uh he brings background to in the space of the company, and he's got some kind of information that, you know, not that it's MNPI, but it is not non-public information in that he's gone out and he's interviewed industry insiders. He interviewed customers, all this sort of stuff. So, he brings a deep background, and he's back on the podcast today. We're talking Fiserv, ticker FISV, and he's done a lot of that here. You know, you'll hear it kind of halfway through, but he went out and on the Clover product, he interviewed 100-plus customers of the of Clover, and he talked to them about, "Hey, what do you like? What do you dislike?" He's got background with a lot of the executives. He's reached out to a lot of people who work with the executives. So, I think all of the deep research here, obviously he knows the industry, but all of the kind of non-public, but also non-material stuff that he's done is really going to shine through. So, hopefully you like it. You know, if you like it, I'll include a link to his Substack in the show notes so you can go check that out. So, we're going to get to the Fiserv podcast in 1 second, but first a word from our sponsors. And you know what? Eff it. I'm not even going to do a separate recording. Let's just jump into our sponsor right now. This podcast is sponsored by trytrada.com. I'm If you're on the podcast, I'm pointing because I'm wearing my trytrada hat. Uh you've heard me talking about it for months. I think if you like this podcast, I think you're really going to like Trada. It is two buysiders who hop on and talk, "Hey, I'm bullish. I'm bearish on this stock. Let's swap thoughts." I think anonymized I think it's really awesome. Actually, one of the ways I prepped is they have a Fiserv podcast from It was January of this year. And if you read it, it's two skeptics who look at it and say, "I want to like it. This stock is cheap, but I'm worried about this. I'm worried about that." They actually, you know, this is after the October to discuss for Fiserv, but it's before some pretty poor Q4 earnings. And a lot of the issues that kind of come home to roost in the Q4 earnings, this Trada this Trada transcript is really identifying, and the skeptics are saying, "Hey, I want to like this stock except for this. I want to like this stock except for this." And the except for this really comes home in Q4. So, I have found it a great way to prep for podcasts, get up to speed on new names that I like. I say it all the time. A lot of people through the podcast have found Trada, and the most frequent feedback I hear is, "Hey, Andrew, I love Trada. I just wish there was more coverage. I wish there were more interviews. I wish there were more companies that were covered." So, if you like this podcast, I think you're going to like Trada. Go to trytrada.com. That's trytrada, t r a t a dot com, to see to try the product out. And also, there will be a link in the show notes. If you like Fiserv, I've got a sample of the Fiserv transcript that I like so much that I used to prep that they will make available for free. So, you can go check that out as well. Link in the show notes. And now onto the Fiserv podcast. All right. Hello, and welcome to the Yet Another the Yet Another Value podcast. I'm your host, Andrew Walker. With me today, I'm really excited to have on for the second time Shoe Zhang from Gini Value. Shoe, how's it going? Jingshu Zhang Doing well. Going well. Thank you, Andrew, for having me. It was a lot of fun last time. Andrew Walker It really was. Last time we discussed EDU, and I think I told you that I started pointing people to it: “If you want a pitch-perfect example of how I like a podcast to go, it’s Shoe’s work combining on-the-ground research, his background, and everything else.” Shoe, the reason we’re having you on is to talk about Fiserv. The ticker is FIS V. What is Fiserv, and why are they so interesting? Jingshu Zhang Yeah. I guess the entire payment space is in the doghouse right now. Andrew Walker That’s one of my questions, absolutely. Jingshu Zhang The ETF for the payment space, which is IPAY, is down 17.1% this year. Even the kings and queens, like Mastercard and Visa, are in bear-market territory now. The entire space has taken multiple punches. It started to decline last year when the GENIUS Act passed, and people worried that stablecoins were going to disrupt the infrastructure. Then, in September, PayPal’s CEO came out and said, “Consumers are weakening,” and the payment companies went down further. Earlier this year, Cloud came out with its new technology that enabled really easy software development. Given that a lot of these payment companies are vertically integrated software companies, they sold off again. Last but not least, people are worried about massive layoffs now. With the Iranian situation, oil is going through the roof, and people are worried about a recession, people getting laid off because of AI, and less consumption volume, which is bad for payment companies. So, they’ve really had 1, 2, 3, 4 punches thrown at them. Idiosyncratic to Fiserv, they also had a strategic reset. Andrew Walker Before we go to Fiserv, can I pause you on the idiosyncratic factors? I wanted to ask you about that anyway, so we might as well start there. The payment space overall, as you said, has been hit. Fiserv is trading at 6 times its guidance for 2026 EPS, which sounds very cheap—and is very cheap. It’s trading even below others like Visa and Mastercard. There are 5 other payments companies, including Global Payments and several others. Shift4 has been a popular one among value investors because people really like it. What is it? Jared Isaacman is the CEO. They buy back stock, they’ve got this great CEO, and it’s just smash after smash after smash. Like you said, the space is down 17% year to date. I would have taken the over; I actually thought it was down more. You laid out the reasons: it’s been one bleed after another, with major hits to the arteries. When you look at these factors, what do you think the market is most scared of? You mentioned AI, and I was thinking AI, too. Do you think that’s a real concern? If I just said AI, I think a lot of people would say, “Fiserv is integrated into bank payments. That is the last thing because there’s so much regulation and everything.” On the other hand, they process billions of payments per day, and that’s something AI is really good at. Do you think the AI risk is real, or do you think it’s overblown? I threw a lot out there, so I’d love to get your general overview of the payment space. Jingshu Zhang Thank you. Thank you. That’s a great question, Andrew. I think AI may be a threat for some of these companies—for example, FactSet and Morningstar. I don’t know. Andrew Walker Absolutely. Jingshu Zhang I just unsubscribed from my Morningstar subscription because, literally, Gemini and Cloud do stock summaries much better than the analysts at Morningstar. So, I don’t need that anymore. But for the payment space, I think they’re slightly different in several ways. First, as you mentioned, there are anti-money-laundering and know-your-customer requirements, as well as a lot of compliance and regulatory requirements. It’s not that a couple of guys or girls at home can design something and overcome all the regulatory hurdles. And then, as you mentioned, Global Payments and Shift4. Another company that we own, which is also very cheap, is called Euronet Worldwide. That company has a $2.5 billion market cap and $400 million in free cash flow this year, excluding share-based compensation. So, I mean, 6 times. It’s not easy for people to go to 200 countries to get all their licenses for cross-border money transfers. Even Remitly is still using Euronet’s infrastructure, called Dandelion, for cross-border transfers. So, it’s very difficult on that front, in terms of regulation and compliance. Secondly, they have all the proprietary data from decades. That proprietary data can’t be accessed by large language models. By its very nature, it’s a walled garden, and they can provide the best service to their customers because they own decades of data, whereas external software developers can’t. And I think the third is the network effect. People at a fund I respect, Bow Street Capital, correctly pointed out that there are a lot of software-as-a-service offerings, but only this many are successful. For payments, the two-sided network effect is very strong. It’s not like you have software and can directly go ahead and replace them. They have economies of scale because of that network effect. It’s a self-reinforcing loop, right? And lastly, I think, for bank cores, the AI fear is just nonsense. There’s no way that AI replaces them. But I understand what you’re saying on the Clover side—let’s say, on the POS side, the point-of-sale service, those point-of-sale things. I read a lot of Substack and whatever is written by people who are really technical. They’re really good at technology, but they’re not salespeople. In order to sell these products, you have to go to these mom-and-pop businesses, and when the products have a problem, you need to solve it alongside these individuals. These mom-and-pops aren’t all technology geniuses who can solve all this by themselves. For example, Fiserv recently got into Japan, which uses cash a lot. It’s one of the least digitized developed economies globally. When Fiserv went in, they went through Sumitomo Mitsui Banking Corporation. It’s a merger between 2 banks, and that’s the 2nd-largest bank in Japan in terms of assets. I think it’s on par with Wells Fargo in the US. It’s a huge bank. That bank serves as a distribution channel for Fiserv. In the US, Fiserv has 600 direct salespeople, and they serve 10,000 financial institutions that have local and community-driven relationships with mom-and-pops. The mom-and-pops already have bank accounts open at those financial institutions, so they just have to cross-sell the POS to them and get a commission from Fiserv. The sales component, I noticed, is very little discussed in all those posts. All 4 dimensions combined together—network effect, sales channel, compliance and regulatory reasons, and proprietary data—I believe the payment space has been wrongly killed by the market due to fear of AI. Andrew Walker If I can just zero in on the last thing, I agree with a lot of what you said. As I keep saying, I’ll do calls with people, and 3 months ago I’d say, “Hey, would you ever use AI for this?” They’d be like, “Absolutely not. No effing way. Too mission-critical. Couldn’t risk it.” Then you do a call with them 3 months later, and they’re like, “AI is all I’m using that for nowadays.” You’re like, “Oh my God.” But I do agree with you. The guy in San Francisco who is using 5 kajillion Claude tokens per day is saying, “Hey, every restaurant in the world is going to vibe-code its own payment processor.” You’re like, “There’s just no chance.” As you’re saying, payments processes a lot of payments, so it seems AI-native, but they also have the hardware piece. You also have the fraud piece. Being up 99.9% of the time is great for your and my Morningstar replacement, but if you’re a diner that processes 1,000 transactions a day—that might be high for a diner—99.9% means you’re going to have a couple of fraudulent transactions every day. You can’t afford that. That would eat away your entire margin. I find that fascinating. Sorry, I jumped in. I’m happy to continue this discussion, or happy to switch it up to specifically Fiserv. Jingshu Zhang You brought up a couple of other very cheap names. I did survey the entire payment space, and ultimately, the top 2 positions for us in terms of payments are Fiserv and Euronet. I did look at all the other ones. I know there are a lot of FinTwits on Twitter who love Global Payments and Shift4. This is not based on reason, but usually what the FinTwits love on Twitter will fail, right? You and I both use Twitter quite a bit, so we know that. Specific to Global Payments and Shift4, I believe their capital allocation strategy is a mistake. Global Payments had this asset swap: They sold TSYS to Fiserv, and FIS sold Worldpay to Global Payments. Global Payments and Shift4 are both levered at 3.5 times net debt to EBITDA. Instead of focusing on their cash flow to deleverage their balance sheets, they insisted on buying back their stocks. I believe that is irresponsible capital allocation. I pointed this out when Global Payments was at $80 and Shift4 was at $70. I had already posted these comments on Twitter. People just responded by saying, “We think 3.5 times levered is totally fine.” But the problem is, if we really have a recession and EBITDA goes down, the debt is going to stay there, things are going to blow out, and you’re going to break covenants. I think people fail to understand that a lot of the executives in the US buy back their stocks into extinction. They fail to understand that deleveraging a balance sheet is also going to reduce your enterprise value. Because you are de-risking your business overall, your equity should theoretically enjoy a higher premium, not a lower one. That’s exactly what Fiserv is doing. Because of the strategic reset, its net debt to EBITDA is above 3 times, and it’s determined to lower that to below 3 by the end of this year. In the 4th quarter, it already chipped away $900 million of its debt. It’s doing exactly what it says it’s going to do. It paused its buyback because it bought back so much of its stock, right? And the stock just—I mean, it’s nonsense. Now it’s preserving and protecting its balance sheet and protecting its investment-grade rating. I think that’s the more responsible thing to do, and that’s how I want to align my capital and my clients’ capital. Andrew Walker If I could just jump in as a former cable bull—and I think you mentioned this in your write-up—I used to be kind of a Shift4 Payments bull, and I think in my heart of hearts I still am. Look, when your stock is cheap, you want to buy back the stock, and you can worry about that paydown later. But I am kind of with you. I’ve seen the downsides of it, and I know I’ve talked to a lot of people who are very good on the short side. They’re like, “Look, one of the critical moments where we like to go short is technically when something goes from—you know, if you’re a $100 enterprise value and you’re $60 of equity and $40 of debt—they like to do it when it flips from above 50% equity and below 50% debt to below 50% equity and above 50% debt. When it flips to below 50% equity and above 50% debt, and they’re buying back stock, they actually think that’s a great technical signal that the management team is behind on the fundamentals and kind of incinerating value by buying back stock. The business still hasn’t reset yet.” They think that’s a great technical signal. I used to scoff at that, and now I’ve seen it lead to tears so many times that I’m kind of like, “Hey, it is an interesting concern.” We are stepping on a few of the Fiserv questions. The only other thing I will say there is, it is funny you said you disagree with the Shift4 and Global Payments capital allocation. Fiserv bought, I think, $5.6 billion of stock at $170 per share in 2025, and now the stock is $55. Capital allocation is funny. All right. I think that’s a great overview of the payment space. Why don’t we turn specifically to Fiserv? Maybe you can just give an overview of what they do. It is a big business, but there are 2 or 3 critical segments. Maybe we can talk there, and we’ll go from there. Jingshu Zhang Absolutely. So the company overall had revenue of $21.2 billion last year. Eighty-four percent of that is from the US and Canada, and 16% is international, including Argentina and Japan. They are expanding into Japan. Breaking down that $21.2 billion of revenue, there is Financial Solutions, which they also call the Financial Institutions Group, or FIG. It processes customer loan and deposit accounts and provides core banking services, digital payments, card transactions, and card issuance. They are actually the 2nd-largest credit card issuer, along with TSYS. The other half of the business, about the same size in terms of revenue, is Merchant Solutions. They do merchant acquiring, digital commerce, mobile payments, security and fraud protection, and so on. Clover also belongs to the Merchant Solutions segment. I agree with you 100% that they bought back $5.6 billion of their stock and the stock went down 70-plus percent. That was under the previous management team. Perhaps we should talk a bit about the management team. The previous CEO, who is now the head of Social Security, is Frank Bisignano. He probably has the absolutely worst CEO rating I have ever seen on Glassdoor. Ever. I have not seen a worse one. I think the CEO approval rate is 12%. Based on what the new CEO said during a town hall meeting, the new CEO, Mike Lyons, came from PNC Bank, which is one of the largest clients of Fiserv. Mike has a pristine reputation and a very strong track record. He was actually behind selling off Bank of America’s assets during the financial crisis. After he pruned Bank of America and got rid of a lot of irrelevant assets, Warren Buffett invested in Bank of America through the warrants. So then he went to PNC. He was second in command at PNC and was going to succeed the current CEO. The current CEO is still young, so he was not going to give it up yet. Fiserv approached Mike Lyons and said, “Would you like to join us?” Mike felt Fiserv was the best option for him because, firstly, he could become CEO. Secondly, he didn’t have to go to another regional bank that competes with PNC. So he went there, and he basically said Frank didn’t do anything over the past 2 years. As we discussed at the beginning, before we started recording, Frank really juiced this company by laying off a lot of people. I did a lot of primary research on Fiserv and talked to a lot of their employees. They basically said they anticipate there’s going to be a round of layoffs every time there’s a holiday. To give you 1 example of how bad the business became, it’s such a wonderful business, right? Financial Institutions Group, or FIG, has a 98% customer retention rate. Core banking is the best business model that you can get. If you want to change the core of a bank, it’s basically like walking down the street while having heart surgery. That’s how hard it is, right? Merchant solutions has a lot of recurring revenue, and it’s very capital-light. He laid off so many people that there’s a certain division, a certain group of people at Fiserv called the client technology advocates. I found the job description. The first responsibility of a CTA is to lead as the single point of accountability to a critical client, the business, and the FDS organization of tax service provisioning. That group had just 2 employees when Mike took over, and those 2 employees were responsible for catering to the needs and wants of DoorDash, eBay, Walmart, Webster Bank, WebBank, and a whole bunch of clients. There’s just no way that this works. This is why, if you look on LinkedIn and online, there are a lot of places where people say the service at Fiserv is just crap—total crap. After Mike took over, he noticed how bad it was. He started to hire a lot more client technology advocates. That’s where the strategic reset came from, because he noticed the business was going to fall apart. All your clients are going to leave you if you don’t provide proper service. Now there are more than 30 people in the CTA group, and they keep hiring more. In addition, because so many people who understand the technology had already left the company due to the horrible previous management team, Mike found that there were not enough service people for local banks, community banks, and credit unions. So they acquired Smith Consulting Group, which had been run by Darren Smith for 17 years. When I saw the acquisition, I was a little puzzled. Why would they acquire a consulting group? It was because all these people had already left. A lot of them left for Smith Consulting because of the return-to-office policy under Frank Bisignano. The buyback was under the former CFO. What really puzzled me was that Rob Hall actually bought back $1 billion of stock in the 3rd quarter, after Mike Lyons said there was going to be a strategic reset. This is why there were rumors that there was infighting between the CEO and the former CFO, and the CFO indeed resigned during the 3rd-quarter earnings call. Andrew Walker Shoot, can I just hop in? I think what you’re driving to—and I agree with you—is that you heard, and I’ve seen some expert calls, some Strata calls, and talked to my experts, all this sort of stuff, who basically say, “Hey, look, as you said, if you try and rip out their core business, especially as a bank, it’s like trying to do open-heart surgery.” These businesses—I remember, I think it’s UBS—after they bought Credit Suisse, they spent about 3 years and $750 million to transfer over Credit Suisse’s systems to them. It’s not easy. You don’t rip someone out lightly, and I heard lots of calls where they were saying, “Hey, they pushed their customers so hard in terms of cutting service and raising prices that they were having customers talk about, ‘We’ve just got to do this.’” It was like the old cable company you can’t leave on steroids. So people were talking about that. The other side would be that you had the old CEO, who left in December 2024, and I think people were shocked. This is where the October 2025, Q3 earnings come in. I think in Q3 of 2025 they grew 16%, and then they came out and said, “Of that 16%, 10% is Argentine hyperinflation, and another 4% is one-time contract sales or something.” I think the old CEO gave none of that color and none of that clarity to the Street. So I think it might be fair to say that Mike joins in January 2025, when the stock is at $200. He kind of takes over during the summer and then does, as you say, a strategic reset. It’s everything you’re saying: they had cut costs so far to the bone that customers were actually thinking about leaving, and they had pulled forward all these one-time items and kind of obfuscated the underlying business, making it look as good as possible. The old CEO—you’ve got to hand it to him—leaves with the stock at $200. He leaves for the government, so he gets a big government position and gets to sell all of it tax-free. I think it’s one of those things where Fiserv was the ultimate compounder stock, right? It was at $10 per share in 2010 and $200 per share in early 2025. A 20× return over 15 years is a compounder stock, as you see it: sticky, pricing power, everything these guys love. Just as many compounders do, it took it too far, and Mike has done the strategic reset. Would that be a fair framing of everything I just said? Jingshu Zhang 100%. To your point, the $10 that you mentioned in 2010 was when Berkshire Hathaway was in there. They actually bought Fiserv at $10, and it’s crazy if you think about it: even today, selling at 7 times this year’s adjusted EPS, Berkshire would still make 5.5 times its money over the past 15 years. I can’t believe that after the stock fell 75%. Andrew Walker Yeah, so to your point, it’s the ultimate compounder. I think we’ve laid out a nice background of what the business does. We’ve laid out a nice background of how this was a compounder, and the old management team maybe took it too far. Let me ask you this: you’ve got a position here. What are you seeing that you think the market’s missing? Do you think the market is too concerned about the AI fears? Do you think the market is not seeing that this is a new, great CEO who’s taken all the right steps to get this reset? It could be both, or it could be something else. The market is a very competitive place, and Fiserv is a multibillion-dollar payments company that’s owned by Berkshire Hathaway. There are a lot of eyes on this. What are you seeing that all of those eyes are missing? Jingshu Zhang Okay. Yeah, yeah. Just to clarify, Berkshire owned it for a couple of quarters, and then they sold it. I think my variant perception here is that the market sees this as a legacy play that’s going to melt away. Whereas, based on my close following of this company, I believe the new executive team is one of the absolute best in the fintech space and is going to be able to navigate the tectonic shifts of the payments landscape very successfully. I’ll expand a bit on that to provide more meat to substantiate my claim. The CEO is great, but he’s not the greatest part of the story, I believe. The true legend here is the COO, named Takis Georgakopoulos. Andrew Walker I’m glad you pronounced it, not me. [laughter] Jingshu Zhang Takis basically started the payments division of JPMorgan with $0 in revenue and 7 people. They grew it to 25,000 people and a $20 billion revenue run rate. The payments space alone is double the size of Fiserv’s payments and merchant solutions right now. When he left, Jamie Dimon actually threw a private party for him, and Jamie spoke, thanking him and everything. Takis joined Fiserv in late 2024, I believe. The reason he didn’t become CEO is that he’s a very tech-driven type of person. He said himself that he would become a physicist, but somehow he has a PhD in mathematical economics, I believe, from Columbia University. I talked to a couple of friends in the fintech space, and 1 of them is a founder of a fintech company. He told me it’s always therapeutic to listen to Takis talk. I agree with him on that point. I listened to all of Takis’s public interviews and everything, and he always thinks in binary trees, which is exactly the way Warren and Charlie would think about things. He joined Fiserv, and a lot of the talent really followed him. I’ll give you a couple of examples. The former global head of e-commerce and tech sales, Ed Gaglio, became the global head of business development at Fiserv earlier this year. Lia Tao, who was the global head of embedded finance and solutions at JPMorgan, left and joined Fiserv as the enterprise platforms CRO earlier this year. Sanjay Saraf, who was the chief product and customer officer of JPMorgan, joined Fiserv as the merchant services CPO last year. Robert Clarkson, who was the chief revenue officer of Stripe Americas, left Stripe to join Fiserv earlier this year and became the chief revenue officer of small and medium business and Clover. Adam Hyde, who was the global head of HR operations at JPMorgan Chase, has come to Fiserv to become the chief operating officer of merchant solutions. I’ll give you 1 last example. Johar Sohi spent more than 2 decades on the buy side. He was a portfolio manager at Nuveen with a very strong track record, and he decided to leave the buy side to become the chief performance officer of Fiserv. These are pieces of information that I’m afraid the market won’t really look into. Fiserv has dropped so much, and a lot of people tax-loss sold. They feel like this new management team is unproven, right? But I’m actually seeing all these positive changes. They are very profound changes. I joked to my friend that this is the “Avengers assemble” moment of all the giants from JPMorgan Payments, which is one of the most powerful powerhouses in this space. They all left JPMorgan to join Fiserv. I was like, “Jamie Dimon threw a party for Takis. Takis Georgakopoulos, you’re taking all these people away from JPMorgan.” These are the best talent. Lia Tao has a Ph.D. from MIT. She was at McKinsey and then joined JPMorgan, and I’ve listened to all her public interviews. They were all fabulous. These changes aren’t in the press releases or the earnings calls, and you won’t see the effect immediately. But I’m seeing all the talent that Fiserv has attracted. I’ve just given some of the names; there are more. I believe it is a positive reinforcing loop, because the more talent you have, the more talent wants to leave and join this place. You reach critical mass, and then you take off. Andrew Walker You just described the bull thesis for Google in 2010, right? Look, I love that setup. The company is trading like a melting ice cube. It’s trading at 6 or 7 times this year’s EPS number. This year’s EPS number is hopefully, as they said, “Hey, this year is kind of the pain, and then we start building and growing in the next year.” I can’t remember the exact quote, but this is the reset year. You’ve got a new CEO who, to me—which is where I spend more of my time—has made all the right moves. He pulled some very difficult levers that were left to him and were, in a way, forced by the prior CEO. He took the medicine. He took the short-term pain. Underneath him, you’ve got a great CTO who’s building out this great organization. But let me ask you: There’s the Fiserv bank side, and then there’s the Fiserv Clover side. One of the bear theses I’ve heard is, “Hey, Clover is a legacy product. All the new cool kids are going to Toast and Square.” It takes a while, because, as you mentioned, even with just point of sale at a restaurant, if you’re on Clover at your point of sale, you’re not going to rip that out easily. But for a lot of these point-of-sale and retail businesses, what people say is, “The legacy payments take a while, but every new business goes on Toast or goes on Square.” Clover doesn’t die because all its new customers aren’t renewing; it dies because eventually its customers start going bankrupt, and it just shrivels up as Toast and Square take over. So let’s focus on the Clover side. How do you think about that piece, and how valuable is the Clover side versus the core Fiserv side? Jingshu Zhang Oh, boy, Andrew. This is such a wonderful question. I was so excited. I did a lot of boots-on-the-ground work. I actually interviewed close to 200 restaurants. Andrew Walker Can I pause you there? One of the things I love on a podcast, and one of the reasons I liked the EDU podcast we did, is when people bring obviously great knowledge of the 10-K and the business stuff. But in your write-up, as soon as you said, “You interviewed more than 100 individual restaurants,” I wanted to highlight that. When you say, “This is how people are thinking about Clover,” you actually went and did it. This is information that only you have, and now the listeners get that value too. I love it when people can bring an anecdote from talking to 1 or 2 restaurants, but you talked to more than 100. I just want to give you kudos and make sure people understand how unique that is. That’s the type of thing that the best investors always have in their back pocket. Jingshu Zhang Thank you so much, Andrew. I even reached out to their top salesperson. His name is Austin, and he’s such a great salesperson. I’ll talk more about him. I even offered to collaborate. I actually tried to collaborate with him to sell Clover POS for them, because if I get to sell it, I get recurring revenue. So I’m actually doing that. Andrew Walker You guys, that was the disclosure. You’re on the Clover referral side. I know what he planned. Jingshu Zhang Yeah. So, Andrew, firstly, you said it’s maybe an ice cube. I think 70% of the POS systems in the U.S. are still legacy POS systems. They’re not Toast, Square, or Clover. They’re just like tax global type of POS. Here’s the interesting part: If the restaurant doesn’t go under, the restaurant owners don’t have a huge incentive to change the POS. As long as it can accept payments, even the oldest tax global payment in Flushing are still functioning. I went to Flushing, had lunch, and talked with the restaurant owners there. I asked, “Can I offer this Clover thing to you?” They said, “This thing is still functioning, so we’re not going to switch just yet.” There are 70% of the POS systems in the U.S. that haven’t been updated, so they’re not really reaching the saturation point where they’re competing with each other fiercely. More importantly, Toast and Clover are facing very different niches in the payment space. People keep telling me, “Toast is eating Clover’s lunch.” The thing is, Toast and Clover are just facing very different niches. If you don’t have a kitchen, it’s almost never economical to have Toast, because its monthly subscription fee and payment processing fee are much higher. For a dining restaurant with a kitchen, Toast makes 5 times as much money as it would if it went into a non-kitchen, mom-and-pop-type restaurant. It’s a sort of innovator’s dilemma: Why would I go there if I could make so much money here? Toast has the most integrated system. It developed all its software in-house, so the customer experience is very smooth. It’s great. Clover has more integrated third-party apps on its POS. However, the price is much cheaper for Clover for mom-and-pop businesses that aren’t full-service restaurants, like a crepe store or a burrito store. That’s why in Union City and Weehawken, where I live around these places, it’s all Clover. Most of them are Clover because they don’t need the overkill of Toast. In terms of volume, you mentioned that it just declined, and that’s definitely a metric we should follow. If that metric really deteriorates, then the thesis will break apart. So far, I’m noticing that Clover’s volume was actually quite stable, even in Q3 of last year, when the stock went down 44% in a day. That quarter wasn’t about Clover volume; it was due to the reasons you brought up: Argentina and overcharging the bank clients. Clover volume was just hovering around 10%, and this year it’s going to grow by around 10% again. There’s also another way to cross-validate this claim earlier than the market, through a publicly traded company called Paysafe. Paysafe has a division that is an ISO, or independent sales organization. In the U.S., the banks, although they are channel partners, mostly just serve their clients. They don’t really sell these products. They delegate that responsibility to the so-called ISOs, and then you have tiered ISOs: You have a big ISO, underneath which you have 3 smaller ISOs, and they all make money. Paysafe has an ISO division that sells Clover, and they said it’s one of the best products. I think it grew by more than 50% for them last year. They said it’s one of the best fits for small and medium-sized businesses in the U.S., with great functionality. What I’m seeing is that the volume has not collapsed, the ISO is giving very positive feedback, and the restaurants I talked to are very happy with their Clover terminals. I also happen to know Wenling Shi, the CEO of Toast, and he’s a CEO whom I greatly respect. He first started with delivery and then pivoted into the POS space, and now his company's private valuation basically beat. Based on talking with his employees and with him, he regards the POS as a very niche market with different needs. Toast has a specific niche, which is Asian restaurants. They kick everyone’s ass there, but they can’t really get into Mexican restaurants, right? Clover dominates, at least from the restaurants that I talked to, among mom-and-pop businesses, especially minority ethnicities. Andrew Walker Yeah. So let’s break it up. So you've got the Clover side and the Lightspeed Financial side. How do you value both, and maybe we can break into some of the parts here? Jingshu Zhang Yeah. In terms of valuation, I kind of like the one-foot hurdles. When something is selling at this level, this year they are projecting an adjusted EPS range of $8 to $8.30. Some people might frown at adjusted EPS, but for Fiserv, its adjusted figures are much cleaner than those of Fidelity National Information Services or Global Payments. It's mostly the amortization of the acquisition-related intangibles from Fiserv's purchase of First Data. So their adjusted EPS is quite reflective of reality. Just so people know, this is 2025, not 2026. If you want to take away all their adjustments, they report $6.34 per share in earnings, and if you add their adjustments back, they report $8.64. Obviously, that's a big difference, but this is a $55 stock. Even if you said, "Forget all of those adjustments and get them out of there," and as you said, they're not huge, the biggest one is amortization of acquisition-related intangibles. Of the $2.30 per share, $1.90 is coming from amortization. That is your big amortization, which most people would not push back on as an add-back. But even if you ignore it, we're still way under 10 times earnings right now. So we don't need a lot of things to go right for us. As long as this thing is not a melting ice cube, if it trades like this, it's fine. By the end of this year, they'll probably be somewhere like 2.8 or 2.9 times net debt to EBITDA, which is pretty safe territory, given that this is after the reset and with all the capital and operating investments put into the business. Next year, they generate something like $4 billion-plus of free cash flow, and the business is at $28 billion or $29 billion right now. They can spend some of that to buy back their shares, and then it's very accretive to earnings if they just trade at the current level. I think Takis is going to do some wonders here, just like he did at the payments division of JPMorgan. I'm already seeing a couple of very smart moves at Fiserv. For example, they bought StoneCastle, and they issued their own cryptocurrency called FIUSD, their own stablecoin. This is already being used by North Dakota Agricultural Bank, I believe, for its ecosystem. StoneCastle will provide the liquidity that allows the stablecoin to work, because people worry that the banks will lose liquidity. Every stablecoin has to be backed by $1. However, if you have an ecosystem where whatever is generated gets recirculated back through StoneCastle, then you retain the liquidity within your bank consortium. That was a brilliant move. I think they can deliver low-double-digit EPS growth on a go-forward basis. This thing should at least be valued at maybe 12 times earnings, if not more. Next year, they're going to generate more than $9 of adjusted EPS, so they're trading at 6 times 2027 earnings. Even if we just get 12 times, that's a triple-digit stock. Andrew Walker No, look, I'm with you. Let me ask one question, and it's always tough. You've got a stock where the new CEO comes in, and a lot of his pay package is struck with the stock at $180 to $200. You've also got a lot of the new management team coming in over the summer, before the October reset, so a lot of their compensation is struck there. In February, I believe they top off grants to all of the top brass to make up for the fact that they came in and got bags. That's good and bad, right? You hate to see somebody come in, take a job, and then have the stock go down and give them bags. At the same time, you give them a reload. You come in thinking you've got this great business, and then you're like, "Oh, I've got to reset." But I think I'd push back on you a bit. You've got this business where you see the value, right? We're trading at 6 to 7 times price-to-earnings after this year's reset, we get double-digit growth, and we've got the best guy to run the payments group. We've got a great CEO who's taken the medicine, reset this year, and is delivering double-digit growth. The stock is off to the races, right? Then you've got the company focusing on paying down debt. You and I have talked about the capital allocation decisions there, and maybe that's the right move, but insiders can come out of their pockets and buy stock. All of these guys have been very well paid historically, and they're getting pretty big compensation packages. You don't see any insider buying. You don't see any director buying. I guess I would just say that if I'm looking at the incentives, it seems to me that they've got some line of sight to the turnaround. They've got the core team here, and they're starting to see the green shoots, but I'm not seeing the incentives. The performance stock that they just gave the CEO in February, if I'm remembering correctly, was very interesting. They said, "Hey, for the performance metrics for this $18 million PSU package we're going to give you, we're going to decide the performance metrics when we do Investor Day in 2026." I'm wondering, just from a timing perspective, if there's another shoe to drop. Should we be waiting for Investor Day? Are we 6 months too early here? That doesn't mean we're 6 months too early if it doubles, because it's still fine, but maybe we get another bite at the apple. Maybe we should see how Investor Day goes. Maybe there's 1 more reset. So I threw a lot out there, but I guess what I'm seeing is: why don't we see insiders being a little bit more bullish here? Jingshu Zhang Yeah. I think there have been 3 insider buys thus far after the reset. One is from a director. I forgot his name, but he was, I think, the CEO of Union Pacific. Andrew Walker I think you're looking at Lance Fritz, who bought 10,000 shares, about $650,000 worth. Jingshu Zhang Yes, Lance Fritz. If you look at his track record of insider buys, I think he only made 2 insider buys. One is Fiserv, and the other is Parker Hannifin. Andrew Walker You are correct. I'm looking at it—he's had 2 buys. Yep. Jingshu Zhang That was a clean buy, and the stock almost tripled. So Lance knows what he's doing. The other 2 people who bought are the chief legal officer and the chief financial officer. The chief financial officer just joined this company after the third quarter. He's been in the position for just several months, and then he bought. I think he bought $1 million worth of shares. Andrew Walker Correct. Jingshu Zhang So it's good that the legal officer and financial officer both bought stock, because accounting-wise and legal-wise, they're probably fine. I would love to see Mike Lyons and Takis Georgakopoulos buy their stock at this level. On the other hand, the proxy statement that just came out last week shows that Mike's base salary is about 7%, and the incentive is about 13%. He got 0 last year because there was this financial reset, so I understandable he was I mean I can't believe it, because he's such a career-driven man. He was first at Maverick Capital, one of the best hedge funds on Wall Street, and he covered the fintech space, so he knew Fiserv back then. Then he was at Bank of America and PNC Bank, where he was second in command. He interacted with 100 products from Fiserv, so he knows what is going on at Fiserv. If Fiserv were really just a sham, I can't believe someone as shrewd and career-driven as him would have jumped ship to Fiserv. Eighty percent of his salary is annual equity awards, and 60% of the shares are performance share units. I like the metrics: 20% of the weighting is free-cash-flow conversion, and 30% is adjusted EPS. In addition, he's required to have stock worth 12 times his base salary. Andrew Walker So I hear you, but if I were going to push back slightly, I'd say, "Hey, you were out here telling me about Mike, and I think, as people have heard through this podcast, he's done a pretty good job." I think he was dealt a 7–2, and he's done a pretty good job of saying, "Oh my God, I thought I was coming into a growth company with a compounder, and once I got under the hood, a lot of the compounding was Argentina inflation. We cut prices to the bone." I think he's done a good job of instantly taking his medicine. He becomes the full-time CEO in June, right? I think that's when the prior CEO officially gets appointed chief of social security. Within 4 months, he's doing a full reset of the whole organization. I think he's done well, but I'd push back on you. I hear you: he's got to get stock compensation worth 12 times his salary. But, as I said, the company just reloaded him with $18 million of PSUs, whose performance metrics will be set at Investor Day. I'd say, "Hey, the guy makes $1.2 million a year. I don't know, but in stock he's basically already there, right? Just on the grant." I do love having a lot more stock, but as I've written to some directors, "Hey, if you've got stock worth 5 times your annual board fees, that's nice, but if you did that by earning the board fees over 7 years, I don't know if you're really that aligned, right? You might just look at this as some pension." I'll just keep clipping more and more board fees. And just 1 last piece of it: the chief admin—it is not lost on me—buys $500,000 worth, but if you look earlier this year, when the stock was in the 200s, he sells $800,000 worth, right? So in some ways, he's actually doing the best of 3 trades, right? He sells, and he's buying down 75%. He's buying the same, a little less, back. Anyway, long-winded way of saying I'm with you. He seems aligned; he seems great. But if I was going to push back, I'm just not seeing it. I'm here to be all-in on the stock price, and he doesn't have to be, but it's something I do like to see, so I'll pause there. Jingshu Zhang Yeah, definitely. I agree. I think this is the weak part of the bull thesis, because if the CEO and COO are not buying, why are we as investors so enthusiastic about it? I totally agree, and I do think they have a lot of work to do to really turn around the ship. The morale was extremely negative when I talked with people who worked at Fiserv or who still work at Fiserv. One of the people I talked to had already left Fiserv and joined another bank. He said, “Frank is just the worst,” because there was software called Sapiens installed on every computer that monitors every employee. The employees got so freaked out that they would bring the laptop to the bathroom—not just to lunch; they would actually bring it to the bathroom with them. This is how freaked out people were. All the previous management-team people had nicknames. Frank Bisignano's nickname is Frank the Tank, and another person who was the head of the FIG, the Financial Institution Group, was John Gibbons, and his nickname is John the Giblets. When I pronounced these names in front of their own IR people, they laughed hysterically. This is just a show. This is a crap show. If it weren't for the absolutely phenomenal business model of a compounder, this thing would have been killed a thousand times over. So I think there's a lot of heavy lifting to do. If I were at the helm, with all my salary, I don't think Mike is that rich. I have heard people who are internal to Fiserv say that he has a living standard that his base salary will allow him to maintain, but it's not a huge amount of money. Andrew Walker Yeah, okay. I'm just going to tell them to get the fudge out of here, because I'm looking at the proxy. I understand some of this is paying off prior vestings. From memory, he gets a $12 million award to make up for an $8 million award that he has to give up at PNC, so they gross up for taxes. But get the fudge out of here if you're going to tell me a guy who made $70 million in 2025 isn't that rich. I'm not about to come out here and cry for you, and I'm sure I could find multiple years of him bringing in $5 million. You know, it reminds me: The New York Times had a piece that was like, “This couple is just struggling to live on $500,000 per year on the Upper West Side.” They broke down their finances, and they were like, “We have to save $10,000 per month. That is a required line item.” You would kind of be like, “How tone-deaf is everyone here that they have required expenses of saving $120,000 a year?” That's more than the average American family makes in a year. So anyway, I'm sure he's equity-motivated and he's got a lot of stock, but I'm just not going to cry poverty for a guy who's made $70 million. Let me ask 1 last question. Sorry, I hopped up on a real high soapbox there. Jingshu Zhang Can you let me just chime in with 1 sentence? So I'll tell you this little secret. There is a website called TheLayoff.com. Fiserv has a very active board on TheLayoff.com. I pretended to be an employee who was very angry, and I posted multiple times on that TheLayoff.com board that Mike is a failure because he's not buying the stock in the open market. I posted multiple times. I monitor that board very closely on a daily basis. All the posts about Mike—I'm sorry, Mike, but I posted these things because I was pissed that you were not buying shares in the open market, because your stock is so cheap and you are so rich. So, Mike, shame on you. But it is very puzzling and interesting that all these employees absolutely support him. Maybe that just tells you how absolutely abhorrent Frank Bisignano is, such that any change is a positive improvement. If you look at Glassdoor, the approval rate of Mike Lyons is 70%–71%. That's the interesting part. I just had to drop that. Sorry that I interrupted. Andrew Walker That's fantastic. All right, I think TheLayoff.com is what you're referencing. I can't find it, but I'm going to go look later. Let me ask this last question here, and then I'll give you the last word and we'll wrap it up. Jana, I believe, comes out in February with one of those activist things that's kind of like, “We think the stock is cheap, and the guy's doing great, but we need to say something.” They kind of say, “Hey, we support selling non-core assets,” and everything. But here, Jana is a well-respected activist firm that has taken positions at big companies, gotten change, gotten board seats, and everything. I don't think they push for any of that here yet, but I just thought I'd ask you: Jana's here. What do you think the activist potential is now? What do you think the Jana playbook is from here? Jingshu Zhang Yeah, so at the Wolfe FinTech Forum, Mike Lyons said they currently still like the integrated model, where you have both sides: the financial institutions as well as the merchant side. I personally also think that there is a benefit to having both sides, because you have the financial institution to cross-sell your product to the merchants, and it's just a pretty smooth logic to have both under the same hood. There was a reason why it didn't work for Fiserv, and it didn't work for Global Payments, but I think for Fiserv this could actually work to their benefit. If you listen to some of the interviews, PacWest had an 18-minute interview earlier in March with Fortune. When he thinks in terms of financial and fintech innovation, and how stablecoin is going to change the financial landscape, it makes a lot of sense to make changes both on the FIG side and the Merchant Solutions Group. There was an important comment Mike made: The new management team didn't create this structure, so they are not wedded to it. They will try to make it work, but if it really doesn't, they are not going to be adamant about staying on the same path. I think if they just sell—let's say, sell Clover—they can easily do multiple arbitrage, because currently they are at 6 times enterprise value to EBITDA, I believe. If I were Jana, I probably wouldn't do much at this moment either, because I think the management team is doing all the right things. I personally also reached out to Jana Partners. I said, “Can we have a conversation and maybe compare some notes? I did a lot of work on this.” But I'm small. I'm very small, so they ghosted me. I don't blame them; I'm too small for them. But honestly, if I were Jana, I probably wouldn't do much at this moment either, because I believe Fiserv makes a lot of sense. They focus on clients first. Clover is their baby; it's very important. They're going to have an innovative platform, stablecoin, embedded finance. They have one of the best cloud-native, modern core tech stacks. They are going to be AI-enabled, and they're going to be efficient capital allocators. I feel like, as an activist, I don't have too much to demand. If it were Global Payments, maybe I would say the Global Payments executives are very aloof. Just by listening to their talks at various conferences, I think they're very arrogant in that they think the new developments in fintech are nonsense. They are not seeing any changes. They are sort of keeping their eyes closed and saying, “We are the largest payment processor. We don't care about the others.” I would also say maybe stop buybacks and just deleverage your balance sheet, because you are dangerously overlevered, and buybacks clearly don't work here. Your stock is trading at 5–6 times earnings. But for Fiserv, I don't have complaints. I don't know what Jana is going to do, but I think the management team is doing the right thing. You have some of the real masters at the helm, playing chess for you, so maybe just take the right ideas. Andrew Walker No, look, I certainly hear you. It's just not lost on me that the only thing in payments that has worked over the past 4 years has been either split-offs or selling a company's last division. Fiserv is ripe for that, because Merchant Solutions, which is where Clover is, and the Financial Institution Group—I don't really know if there's a lot of synergies between having the 2 together. When you've got 2 big divisions without a lot of synergies, there's a natural split-off. There are always acquisitions in the payments space, even acquisitions that you never thought would happen, so you could imagine a split-off-to-acquisition path. But as you said, if it's working, you don't need to get in the way. I think there are a few different levers here to pull. Anyway, Shu, we are way over an hour, so I'm going to have to wrap it up here. This has been awesome. I've really enjoyed having you on. I'm going to include a link to the Substack and everything in the show notes so people can go follow all your work there. Whoa, big sneeze. End the podcast? But this has been great. I've really enjoyed having you on for the second time, and I'm absolutely looking forward to having you on for the third time. Jingshu Zhang Thank you so much, Andrew, for having me. It's always a huge amount of fun talking with you, and thank you for all the great and stimulating questions that force me to think. It's great. Andrew Walker You were awesome, man. Thanks so much for coming on. A quick disclaimer: Nothing on this podcast should be considered investment advice. Guests or the host may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial advisor. Thanks.