Storied South American e-commerce company (NASDAQ: MELI) experienced a bit of a fire sale on the stock market Monday. Its shares closed the day almost 5% lower on the back of a recommendation downgrade from a prominent U.S. bank. By contrast, the S 500 index did relatively well, rising by 0.2%.

The downgrade came from none other than Big Four lender Bank of America. That morning, analyst Robert Ford Aguilar pushed his recommendation on MercadoLibre down one peg to neutral. Prior to that, he had tagged the e-commerce specialist as a buy. His move was accompanied by a price target cut to $1,350 per share from the preceding $1,680.

The source of Aguilar's concern is a set of new cross-border commerce regulations in Brazil. Transactions of up to the equivalent of $50 are subject to a 17% value-added tax (VAT), although they are exempted from a 60% import tariff.

Continue reading

Source Fool.com