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The keys to the fall of dLocal, which once again broke its historical minimum

The keys to the fall of dLocal, which once again broke its historical minimum

The actions of dLocal Uruguayan unicorn They once again broke their historic low and the fintech is going through a complicated first semester, after the report that reflected a 50.1% year-on-year drop in its profits during the first three months of the year.

The titles, which fell 1.64% this Friday and were listed at $9.59 in Nasdaq. If analyzed at a weekly level, the decline in the roles of the digital payments It reached 27.68%, accentuating after the losses.

At its current value, the shares of dLocal They are far from what their launch was, on June 3, 2021, since they started at $34.52. Even more notable is the decrease when compared to its historical peak, of $69, reached on August 24 of that year. But, what were the main problems that the fintech until we reach this situation?

Adverse numbers in 2024

In the first quarter of the year, the unicorn of Uruguay reflected an interannual drop of 50.1% in its profits, which became 17.72 million dollars, affected by a decrease in the ebitda profit.

Although the income of the company increased by 34% compared to the same period in 2023, reaching $184 million, the figure decreased by 2% compared to the previous quarter, losing ground in Argentina, although growing in Brazil and Mexico.

In fact, in its previous report, the fintech reported that last year it generated revenues of 650 million dollars and a total payment volume of 17.7 billion, but its titles also fell, possibly due to the drop in earnings per share, which in the fourth quarter of 2023 were 0.10 dollars, when the analysts’ expectation was 0.15 dollars, as published by the specialized site Investing.

A judicial fight with the Argentine government in 2023

The actions of dLocal suffered another turbulence in mid-June of last year, when they reached $9.82 amid complaints from the government of Argentina, that pointed to the signature money laundering under the accusation of “fraud” or “scam”, which even generated rumors of sale.

The then Minister of Economy, Sergio Massa, accused the company of leaking currency worth up to $400 million, which prompted a class-action shareholder lawsuit months later sponsored by the New York law firm, Pomerantz.

From the neighboring country, also the General Directorate of Customs analyzed the 2022 fintech transactions and discovered payments from people who never hired the services of a supposed educational institution, which sparked a scandal.

Muddy Waters accused dLocal of “possible fraud”

About the end of 2022, dLocal suffered a sharp drop in the value of its shares, linked to a harsh report from the hedge fund Muddy Waters Capital, who reported a “possible fraud” and decided to short the securities after noticing “repeated failures in its third-party verification, repeated disclosures about its total payment volume (TPV) and accounts receivable that flatly contradict each other.”

For Muddy Waters there was “a contradictory discrepancy between two key subsidiary accounts and collection accounts”, denouncing “a series of lies, along with accounts that he has altered to corroborate the lies”, for which he spoke of “signs of corrupt books.”

About, Carson Block CEO and owner of the investment firm, said that “if these were serious people who really wanted to run a long-term payments company, they would not have sold $1 billion of shares in the first 5 months of going public.” company stock market.

On the other hand, the Uruguayan company warned that “the report contains numerous inaccurate statements, unfounded statements and speculation.”

Source: Ambito

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