Summary:
- DLocal’s share price dropped by 11% this week due to a secondary share offering at a lower price.
- Despite the drop, the company’s operations remain strong, and the offering is not a reflection of DLocal’s performance.
- This dip in share price could present an opportunity for investors looking to add to their DLocal position.
Rewritten Article:
DLocal, a rising star in the payment platform industry, saw a significant 11% decrease in its share price this week. The drop occurred following the announcement of a secondary share offering, where 15 million shares would be sold at $12.75 per share. With the stock price hovering around $14 before this news, it was expected that the shares would decline closer to the offering price, leading to the drop.
Despite the temporary setback, there have been no fundamental changes in DLocal’s actual operations. The primary reason behind the share offering is the sale of a portion of shares by the company’s largest shareholder, General Atlantic. This move does not reflect poorly on DLocal, as General Atlantic will still maintain a significant stake in the company. Investors should note that investment groups like General Atlantic have various reasons for selling stocks, and the timing of this offering may simply be strategic.
Looking beyond the short-term market fluctuations, DLocal remains an attractive investment opportunity. The company connects major merchants globally to billions of consumers in emerging markets through its extensive suite of payment options. With a 53% growth in total payment volume in the most recent quarter and a projected 40% to 50% TPV growth in 2025, DLocal shows promising long-term potential. At a free cash flow multiple of just 21 times, the stock may be undervalued, making it an intriguing prospect for investors.
In conclusion, the recent dip in DLocal’s share price could be viewed as an opportunity for investors to consider adding to their position in the company. Despite the market reaction to the share offering, DLocal’s strong growth prospects and market presence make it a compelling choice for long-term investment.
