The CEO of the Uruguayan unicorn dLocal, Sebastian Kanovichspoke to JP Morgan Chase bank about the financial cataclysm the company faced last week, after its shares plummeted 51%.
At the exchange, Kanovich discussed the company’s prospects and industry trends. As reported by JP Morgan on his website, the CEO of dLocal stated that the “recent short sales report claims are inaccurate”referring to the document released by the research company Muddy Waters.
The company always segregated client funds from their own, never had a deficit even before the IPO (public sale offer, acronym in English)”, Kanovich told the US bank. “The strength of revenue and acquisition rates reflect the value that dLocal offers to its clients,” he added.
“The loans to the CEO and COO were fully repaid with interest prior to the IPO,” the executive added. Kanovich further said that “all the final data published are correct”, in contrast to the Muddy Waters report. In this sense, the report from that company accused dLocal of having “accounts that he 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.”
On the other hand, Kanovich expressed that “growth trends remain intact”regarding the operation of the unicorn.
“The client base is probably as strong as ever, and the best prospects today are in countries in regions like Africa,” added the CEO of dLocal.
The report that sparked the stock plunge
“It is likely that dLocal is a fraud”, was one of the phrases that could be read in the report prepared by Muddy Waters on the Uruguayan company.
The document indicated that the controls of client funds are “concerning.” He added: 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.
After the document was released, dLocal released a statement: “The report contains numerous inaccurate statements, unsubstantiated claims and speculation.”
