Why DLocal Stock Is Plunging Today
Hedge fund Muddy Waters is out with a report critical of DLocal (NASDAQ: DLO), concluding that the Uruguayan payment company is "likely a fraud." Investors are reacting by selling shares, sending DLocal stock down as much as 45% on Wednesday afternoon.
DLocal specializes in payment-processing services for merchants operating in emerging markets. The company was an instant success following its June 2021 initial public offering (IPO), with the shares nearly doubling in its initial months as a publicly traded company, but the company has fallen below its offering price in recent months.
Prominent short seller Muddy Waters believes that initial success was built on deception. On Wednesday, the firm revealed it is short DLocal shares, with Muddy Waters alleging that DLocal disclosures "flatly contradict one another" and saying there is a "contradictory discrepancy between two key subsidiaries' accounts payable and accounts receivable."
Source Fool.com
