Founded in 2013, Nubank has grown exponentially in recent years, thanks in part to its services and good relationship with its customer base. In December of last year, fintech Its valuation of US$41.7 billion makes it the most valuable company in its niche in Latin America.
Nubank acts with its good relationship with its target audience and its focus on expansion. Go public on the New York Stock Exchange (NYSE) that same month, it invited its customers to become partners. “part of the company” — a BDR share representing a fraction of an internationally issued document. Then the initial price per share It is estimated at R$8.36.
Seven months later, Nubank’s “small piece” is now worth around R$3.28one representing 60.76% decrease since its launch. From this context, TecMundo simulated an investment in the company and explored possible reasons for its devaluation; payment!
How much is R$100 worth today in NuBank parts?
Considering a BRL 100 purchase of Nubank shares (NUBR33), on the day of issue the investor will have a loss of 60.76 BRL and the balance will decrease to 39.24 BRL. In another example, if a customer who bought R$1,000 in “bits” from a digital bank had to withdraw his money now, the amount would be reduced to R$392.40.
Volatile, the investment shares similarities with the performance of other similar companies, and even Bitcoin, which is facing a devaluation at similar rates. In other words, the decline follows a global trend that has affected even giants like Meta, Apple and Tesla.
After all, what caused the drop in Nubank’s price?
Not surprisingly, the problem affecting parts of Nubank is the same one plaguing the rest of the international economy: rising inflation. In the case of fintech, this negative impact translates into a number of other contiguous factors. Probably the most significant is the increase in interest rate announced by the U.S. Securities and Exchange Commission (SEC) that will account for 80% of the company’s poor performance, according to Lucas, equity analyst at Kínitro Capital. ribeiro
Due to the capital injection for the fluidity of the business, companies in the tech sector were severely impacted by the decision, resulting in an overall decline in such shares. Ribeiro explains in an interview: AND-Investor: “The larger a company’s growth profile, the greater the impact of higher interest rates; and fintech [Nubank] It’s a very fast growing company.”
More interest, less purchasing power, more default
In parallel, Nubank still faces other consequences of inflation. With the general increase in the prices of products on the market, the average Brazilian increasingly dependent on credit and with less purchasing power.. Risky balance often has bittersweet consequences for fintech: On the one hand, the context attracts new account holders seeking loans, while at the same time more prone to an increase in loans. default rates.
Looking at the numbers, the company faces a 90-day default rate of 4.2% in the first quarter of this year – an increase of 0.7% since the end of last year. Likewise, for the period between 15 and 90 days, the same rate increased by 1.1% and reached 3.7%. In practice, this means that some of the profit per Nubank customer will go up in credit card interest, something that proportionally increases risks and makes it harder to get a loan – as economist Fabio Louzada explains. E-Investor.
Will Nubank’s shares rise again?
Like other companies in its niche, Nubank’s shares should revalue only in a more favorable macroeconomic context. As Inv analyst João Abdouni explained, fintech also took an inflated valuation that normalized with the decline. Together, the aforementioned factors drive large investors away from Roxinha’s shares.
Advice to investors purchasing shares in an Initial Public Offering (IPO), Abdouni recommends a review of initial investment criteria: [do Nubank]”The best option is to move the shares long term, because perhaps the bank’s history is one of successes,” he explains. E-Investor.
Traders who have not yet placed a bet on Nubank are advised to be careful. Even though the prices are cheaper compared to the IPO, that doesn’t mean they can’t drop any further. Abdouni suggests waiting for new earnings reports fintech before contributing. However, he recommends that for the most ambitious, they should not invest more than 5% of what is available in the portfolio – because the company is still growing and therefore carries greater risk.
What does Nubank say about the decline?
HE TecMundo He contacted Nubank and requested a position regarding the decline in the shares. In response, the digital bank’s advisory sent the company’s latest financial report, in which it announced “the strongest quarter in history.”
On this occasion, Nubank CEO David Vélez also commented on the subject. “Despite recent short-term market volatility and the looming end of our lockdown, we are fully confident and committed to long-term value creation, as reiterated by our key shareholders.”
Source: Tec Mundo
