The actions of the Uruguayan Unicorn dLocal managed to stop their fall this Thursday after suffering a black wednesday in Wall Street with a 51% plunge.
This Thursday, the actions closed at US$10.60, with a daily recovery of 1.34%. At the beginning of trading in New York, the shares continued to fall with a value of US$ 10 and during the trading day the behavior was volatile. After Uruguayan noon, the shares reached their highest level and traded at US$ 12.30.
dLocal Actions
The collapse of dLocal shares on Wednesday followed a report from the research company Muddy Waters which qualified as “probable fraud” to the Uruguayan unicorn.
In that report, he argued that dLocal “has repeated disclosures about its total volume of payments and accounts receivable that flatly contradict each other. There is also a contradictory discrepancy between the accounts payable and accounts receivable of two key subsidiaries.
In another passage he stated that “these types of seemingly innocuous misstatements are instead often signs of corrupt books”. He added that keeping the numbers right once they start to be manipulated can become a big stress.
dLocal
“While investigating, we found a number of lies the company has told, along with accounts it has altered to corroborate the lies. This series of lies had to do with disguising the timing of an option exercise and the source of funding for that option exercise with insider information,” said Muddy Waters.
The report sent dLocal shares plunging 51% on the New York Stock Exchange to $10.5. The sharp drop caused the market capitalization of dLocal was reduced from US$ 6,455 million to US$ 3,155 million this Wednesday.
At the last minute, the Uruguayan unicorn released a statement referring to what happened. “Markets commented today (for Wednesday) on a short sellers report released by Muddy Waters Capital. The report contains numerous inaccurate statementsunsubstantiated claims and speculations“, said.
He added that “short seller reports are often designed to push the stock price down to serve the short seller’s interests to the detriment of the company’s stock. dLocal will refute the allegations in the appropriate forum in due course.”
