$MELI Mercado Libre ...
Updated
The secondary was approximately 2% dilutive in number of shares. But the market has assessed a 12.5% share price reduction, and appears to still be searching for a new level, perhaps lower.
Cautiously optimistic that most of the selling related to this equity offering will abate by Friday this week. But not sure we aren't experiencing broader selling in anticipation of a pending change in Fed monetary policy.
Worse outcome next few weeks would be for
MELI to announce an acquisition.
Best outcome is they use the proceeds to finance the Mercado Pago side of the business and the credit card receivables.
I'm long MELI. Have added shares this week and rolled options to lower strike prices and longer dates. Starting to have concerns about the broader market valuation.
Cautiously optimistic that most of the selling related to this equity offering will abate by Friday this week. But not sure we aren't experiencing broader selling in anticipation of a pending change in Fed monetary policy.
Worse outcome next few weeks would be for
MELI to announce an acquisition. Best outcome is they use the proceeds to finance the Mercado Pago side of the business and the credit card receivables.
I'm long MELI. Have added shares this week and rolled options to lower strike prices and longer dates. Starting to have concerns about the broader market valuation.
Note
Anchored VWAP post secondary offering is $1515 (or $1524 if you include Nov 15th). Those who shorted on the news or immediately prior to the secondary, will need to start covering soon.
Volume is tapering off over 11/16 through today, and the secondary dilution shouldn't cause new selling pressure next week.
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