The massive valuation premium that has adorned the share price of investor darling Afterpay in the last year has been blown away in a few days.The buy now pay later provider - one of the icons of the Australian fintech sector - was pummelled during another trading rout on Wednesday, closing down A$6.30 or 33 per cent to $12.76.Less than a month ago the stock seemed impregnable when it was trading above $41.Afterpay, which has never reported a bottom line profit since it was launched six years ago, appears to be facing an existential crisis as investment analysts review their assumptions about the sustainability of the company's business model.While many analysts and payments industry experts have been warning about the merits of the company's global strategy and its difficulty managing bad debts, most retail brokers have continued to issue bullish commentaries about its earnings prospects.One analyst last month described Afterpay's bigger than expected loss for the six months to the end of December as a case of achieving impressive "topline metrics" and "executing strongly on strategy".The analyst continues to hold a share price target of around $37 on the stock.However, UBS analyst Jonathon Mott has maintained a sceptical view of the company's prospects since activating coverage last October.Mott's main concerns were regulatory risks hanging over the company in Australia and the fact that Afterpay was throwing capital at a new business in a crowded buy now pay later market in the US.Payments consultant Grant Halverson argues that many investors have overlooked Afterpay's  worsening bad debt experience.Given forecast rises in unemployment in the US and the UK where Afterpay operates, Halverson believes bad debts are set to escalate as low income customers encounter repayment problems."I would expect second half spending to reduce significantly as the US and UK freeze, but bad debts to explode," he said.