Walmart (NYSE: WMT) announced yesterday plans to launch a new fintech startup together with leading fintech investment firm Ribbit Capital. John Furner, President and CEO of Walmart US, will be one of the senior management officials who will sit on the board of the new startup.

“For years, millions of customers have put their trust in Walmart to not only save them money when they shop with us but help them manage their financial needs. And they’ve made it clear they want more from us in the financial services arena,” said Furner.

“We’re thrilled to work with Ribbit Capital in a new venture to help us deliver innovative and needed options to our customers and associates – with speed and at scale.”

WMT will be the majority stakeholder in the new startup while it acknowledges that growth “may come through partnerships and acquisitions with leading fintech companies.” The partnership with Ribbit will enable WMT to gain more fintech expertise, as this investment company is one of Robinhood’s early investors.

“When we combine our deep knowledge of technology-driven financial businesses and our ability to move with speed with Walmart’s mission and reach, we can create and deliver financial offerings that are second to none,” said Meyer Malka, Managing Partner at Ribbit Capital.

John Zolidis, President at Quo Vadis Capital, said that the latest news from WMT feeds into his firm’s “unfavorable view on WMT shares at the current time”. Zolidis is concerned that Walmart is deviating from its capital allocation discipline and core competency.

“This will never be material to WMT earnings or justify a change in the stock's value. Secondly, while it would be too strong to say we are "concerned" about this initiative, it does feed into our unfavorable view on WMT shares at the current time. Among the reasons we are not keen on WMT shares (see the attached note for the full thesis) is our sense that WMT is deviating from its capital allocation discipline and core competency,” Zolidis said.

“We see WMT's pursuit of TikTock, venture capital plays in India, the launch of a subscription delivery program, attempts to become a healthcare provider, acquisitions and divestitures of various digital brands, and now this foray into "next generation digital financial products" (we hope this does not mean bitcoin) all to be tangential to the core business.”

Zolidis reiterates that nearly a quarter of WMT's customers do not have a bank account while around half of Walmart customers do not have access to credit.

“Without being judgemental, we imagine the reasons these customers do not have bank accounts or credit would likely also mean they will have little use for "next generation financial products,” Zolidis adds.

Overall, he reiterates that his investment firm remains sellers of WMT shares as they trade near 17-year high valuations.

Walmart share price traded 1.3% higher in pre-open Tuesday.