dLocal Stock Falls: A Buying Opportunity?

Want to know the scariest thing about Theranos? No, it wasn’t Elizabeth Holmes’ gravelly voice, or the way she stared into the depths of your soul with those piercing Manson lamps. It was the fact that some of the world’s most astute institutional investors were so easily duped. If someone like Tim Draper couldn’t see Theranos for the vaporware that it was, then how are you – doing a few hours of due diligence in your underwear on a Saturday afternoon – going to avoid the next Bind Therapeutics?

It comes down to this. As a rule, we tend to trust the world’s most sophisticated institutional investors will do better due diligence than we ever could. So, when a short report gets put out on a fintech firm that does business with some of the world’s biggest companies, we want to watch closely how their customers and investors react. That’s precisely the approach we took for the Muddy Waters Capital short report on dLocal (DLO). From our November 2022 piece titled, dLocal Stock Demolished by Short Report:

dLocal is now having to do damage control for two groups of stakeholders – customers and investors. If they lose one or more key customers, it’s likely the grave accusations in the report have merit. If institutional investors use this opportunity to add to their positions, that’s a vote of confidence that suggests otherwise.