Shares of the Brazilian fintech firm Nu Holdings (NYSE: NU) shot up almost 15% at the moment after going public yesterday. With the preliminary public providing value at $9, Nu raised roughly $2.6 billion in IPO proceeds and is up almost 32% on the week.
Nu, which provides digital banking providers to a whopping 48 million clients in Latin America, is without doubt one of the largest IPOs of the 12 months. Most conventional banks in Brazil cost very excessive charges and make easy banking processes way more troublesome than right here within the U.S.
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Nu actually disrupted the market, giving thousands and thousands of individuals in Brazil and Latin America their first-ever financial institution or bank card account. The corporate first provided a bank card with no annual charges after which expanded into money administration accounts, private loans, cost capabilities, and on-line investing. Nu providers greater than 1 million enterprise clients as properly.
Warren Buffett and his firm Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) invested $500 million in Nu earlier this 12 months when it had a roughly $30 billion valuation. Now, Nu has an almost $55 billion market cap, so the Oracle of Omaha is seeing some good beneficial properties on this one.
I’m fairly stunned — but additionally impressed — to see Nu buying and selling so strongly off the IPO. Previous to going public, Nu dropped its valuation from upwards of $50 billion to the $41.5 billion it priced its IPO at. Moreover, fintech shares have been getting hammered currently.
Nu is undoubtedly a really thrilling story, given the variety of clients it has acquired and its recognition in Latin America. However proper now, as I wrote previous to the IPO, a $50 billion-plus valuation appears a bit wealthy. Given the volatility that Brazilian fintech shares have traded with, I do really feel like there will probably be alternatives to get in at a decrease valuation, though I have been flawed to date.
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