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Nubank plummets 16% and reaches the lowest value since the IPO

May has not been easy for Nubank. At the beginning of the month, the bank’s shares reached a historic low since its debut on the American stock exchange. Even after Goldman Sanchs, the biggest fintech investor, recommended the purchase of the shares, the fall did not stop there.

This Monday (9), the shares closed the trading session with a devaluation of 16.25%, quoted at US$ 4.38, the lowest value since the Public Offering of Shares (IPO). Compared to IPO trading, the cumulative drop is more than 50% in the bank’s share price.

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Nubank’s shares traded here in Brazil, called BDRs, also had a negative result. The shares closed down by 14.41%, being quoted at R$ 3.80 at the end of the day. Now, the bank is valued at $20.5 billion.

Nubank, once considered the largest bank in Latin America, is now worth half of Itaú, the second place at the time, which is now valued at US$ 40.6 billion. With the devaluation, the digital bank also became worth less than Santander, which is valued at US$ 24 billion.

What explains the fall in Nubank’s shares?

Financial market analysts indicate that Nubank’s devaluation is due to more than one factor. One of the sources of uncertainty was the anticipation of the period of restriction on share sales by about one month, or lock upfor the day following the announcement of the results for the 1st quarter of the year, scheduled for May 16th.

In this way, large investors who are shareholders of the digital bank will be free to sell their shares, which can generate additional pressure to sell the shares and also cause a drop in values.

Another factor that influenced the market value of the digital bank was the controversy over the R$ 804 million compensation program for the executive board. Despite Nubank having explained this story, the news was still negative for shareholders.

Finally, fintechs and technology companies in general are being penalized by a scenario of higher interest rates and slowing global growth, caused, among other factors, by the war between Russia and Ukraine. This leads the roles to undergo a strong correction.

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Image: Jo Galvao / Shutterstock.com

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