Following a sharp selloff in Brazilian stocks after election results, ARK Investment Management purchased shares worth $964.8K in Nu Holdings and shares of MercadoLibre worth $3.7 million across two of its exchange-traded funds.
- On Monday, ARK Invest purchased 76,636 NU shares worth via the ARK Blockchain & Fintech Innovation ETF.
- The asset management firm also purchased 723 MELI shares worth $1.2 million via ARKF and another 1,493 shares worth $2.5 million through the ARK Next Generation Technology ETF.
- Veteran investor Michael Burry said in a Substack comment that the sharp decline in MELI stock seemed like a buying opportunity.
Cathie Wood’s ARK Investment Management bought shares in Nu Holdings Ltd. (NU) and MercadoLibre Inc. (MELI) after a sharp selloff triggered by Brazil’s election results.
NU stock plunged nearly 17% at close on Monday and MELI stock lost nearly 8% at close after a surprise win for Leftist President Luiz Inácio Lula da Silva.
Meanwhile, veteran investor Michael Burry said in a Substack comment that MELI’s sharp decline seemed like a buying opportunity.
ARK Invest Buys Brazilian Stocks NU And MELI
On Monday, ARK Invest purchased 76,636 NU shares worth about $964,800 via the ARK Blockchain & Fintech Innovation ETF (ARKF).
The asset management firm also purchased 723 MELI shares worth $1.2 million via ARKF and another 1,493 shares worth $2.5 million through the ARK Next Generation Technology ETF (ARKW) on Monday.
Brazilian Stocks Plunge On Election Results
Along with NU and MELI, the iShares MSCI Brazil fund (EWZ) also fell nearly 20% at close, while the country’s largest oil company, Petroleo Brasileiro (PBR), was down nearly 14%.
Brazilian and global markets had been expecting right-wing Senator Flavio Bolsonaro to win after he exceeded expectations in the first round of Brazil’s presidential election on Oct. 4.
Markets hoped Bolsonaro’s victory would usher in a more market-friendly administration, as the country has grappled with persistent fiscal deficits, rising public debt, and inflation in recent years.
Lula’s unexpected fourth-term victory has revived concerns about political and economic uncertainty and stoked worries about the implications for Brazil’s interest rates and currency.
“I didn’t take sides, but it looked like another rigged election,” U.S. President Donald Trump told reporters following the results. “It looked very bad to me.” The President had not officially endorsed any candidates ahead of the elections, but Reuters reported he had led a campaign to bring Bolsonaro back to power.
Lula won 51.8% of the vote in the latest elections, compared with Bolsonaro’s 48.2%, according to the Superior Electoral Court.
Burry said in a comment in his Substack on Monday that MELI’s decline “is a big hit but I see this as opportunity as I don’t see fundamental impact.” He also highlighted the selloff in NU, PBR and EWZ, noting that Citi expects investor focus to shift to Brazil’s fiscal outlook and that “the risk that likely higher for longer rates will delay the bank’s asset-quality normalization.”
Meanwhile, Pantheon Macroeconomics’ chief Latin America economist Andres Abadia reportedly told Reuters about the market reaction in Brazil, “The initial selloff could moderate as election-related positions are unwound, but investors will demand convincing fiscal commitments before rebuilding exposure.”
Retail Stance On NU, MELI Stocks
On Stocktwits, retail sentiment around NU stock jumped from ‘neutral’ to ‘extremely bullish’ at the time of writing amid ‘extremely high’ message volumes.
One user said, “$NU Going to $15 and possibly higher, fast…maybe tomorrow. Record profits and revenue, just released at bad timing. Holding massive Calls strong.”
Meanwhile, retail sentiment around MELI stock flipped from ‘bullish’ to ‘extremely bullish’ over a day.
A user said, “$MELI def looking to take advantage of lower prices…much, much lower if we get lucky enough.”
NU stock is down nearly 25% year-to-date, while MELI stock has lost about 17% in the same period.
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