Jim Cramer explains why Latin American companies like Nubank deserve a hard look
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- เผยแพร่เมื่อ 8 ธ.ค. 2021
- Mad Money host Jim Cramer joins CNBC's 'Squawk Box' to give his take on the markets ahead of the open on Thursday. Sign up and learn more about the CNBC Investing Club with Jim Cramer cnb.cx/3Ei22n4
Brazilian fintech company Nubank made its market debut Thursday on the New York Stock Exchange, going public under the ticker symbol “NU.” Shares opened at $11.25 apiece after pricing 289 million shares at $9 apiece on Wednesday, the top end of its expected range of $8-$9 per share. The company, ranked No. 40 on this year’s CNBC Disruptor 50 list, raised $2.6 billion at an implied valuation of $41.4 billion.
Nubank launched in 2013 with a purple no-fee credit card in Sao Paulo, Brazil, a country notorious for its high-fee, low-tech banking system. Less than ten years later, the fintech company has survived a recession and a pandemic, emerging with 48 million customers across Brazil, Colombia, and Mexico, and a valuation higher than Chime, Robinhood, or SoFi.
“We were growing very fast up until the pandemic, but people still had some questions about digital banking ... I think it was still scary for a lot of people,” Colombia-born Nubank CEO and co-founder David Vélez said Thursday on CNBC’s “Squawk Box.”
“The pandemic, in a way, forced that behavior to change among most of the population, because branches were closed and it wasn’t even an option,” he said. “People started trying us and realized we were a better option - we charge no fees, better customer experience all in your smartphone, then suddenly we started seeing people in their 60s, in their 70s, in their 80s, people all across Brazil, in different municipalities, start using us.”
Nubank shares came down a little from their first-trade spike and were trading higher by roughly 15% in the early afternoon on Thursday.
To Vélez, the opportunity was obvious: the financial ecosystem in Brazil was inefficient and inaccessible, with five banks controlling over 80% of the country’s assets, annual credit card interest rates running up to 300%, and a third of the population unbanked. According to Nubank, bank branches only exist in 60% of Brazil’s cities, but a digital platform could support customers regardless of location. The company also estimates that it has provided the first credit card or bank account to approximately 5.1 million people as of September 30.
Earlier this year, Warren Buffett’s Berkshire Hathaway made a $500 million investment in the parent company of Nubank. With additional buy-in from backers like Ribbit, Tencent, Invesco, and Vélez’s former employer, venture capital firm Sequoia, Nubank is pushing online banking expansion across the LatAm region. To date, the company estimates that its no-fee structure has saved its customers over $2 billion.
“We don’t think the banking branch will survive the way it is,” Vélez said. “It is too costly to serve the majority of users, especially in emerging markets [like Latin America] where you have a very high cost of operations, so a lot of that physical infrastructure will probably disappear ... most of the providers of financial services 5-10 years from now will be digital companies that will be focusing on the customer, will have a lot of efficiency, and be decreasing fees and interest rates for everybody.”
Venture investors poured $9.3 billion into Latin America in the first six months of 2021, compared with $5.3 billion all of last year, according to a report from CBInsights. In September, SoftBank Group said it will commit $3 billion to kickstart a fund focused on investing in start-ups in Latin America utilizing technologies like artificial intelligence and scout deals in e-commerce and digital financial services as well as blockchain projects. It first launched a LatAm-focused fund in 2019.
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Investing for the long-term by buying & holding quality, proven companies, avoiding panic selling at all costs, buying into dips created by myopic short-term gamblers has been the winning strategy for decades that allows for enough financial success to retire early while being completely debt free.
Proven qualities are for losers.
Im so happy I bought MELI dip.
Jim nailed it. People want real companies that have a solid standing. Not these fly by night get rich and then vanishes over night.
I am burnt 🥵
@@CouncilEstatePopMusic I’ve been there and just what you’re talking about🤬
Is CNBC ignoring the evergrande default?
Process like DIDI listing on the NYSE.
This is the same guy who said the economy is the best it's ever been.
I think I'll take my investment advice from someone else who isn't delusional, thanks.
TWTR management bought 88 million worth yesterday! big time buy.
Make that 93.5 Mil.
Say no to tyrants
Jim: Best economy ever!
Evergrande: Default
Me: Ok Jimmmay boy!
I mean higher interest payments are always better
Dinosaurs talking 🙊🙉🙈🤡
I can't trust him.
PSALM 10
1 Why standest thou afar off, O Lord? why hidest thou thyself in times of trouble?
2 The wicked in his pride doth persecute the poor: let them be taken in the devices that they have imagined.
3 For the wicked boasteth of his heart's desire, and blesseth the covetous, whom the Lord abhorreth.
4 The wicked, through the pride of his countenance, will not seek after God: God is not in all his thoughts.
5 His ways are always grievous; thy judgments are far above out of his sight: as for all his enemies, he puffeth at them.
6 He hath said in his heart, I shall not be moved: for I shall never be in adversity.
7 His mouth is full of cursing and deceit and fraud: under his tongue is mischief and vanity.
8 He sitteth in the lurking places of the villages: in the secret places doth he murder the innocent: his eyes are privily set against the poor.
9 He lieth in wait secretly as a lion in his den: he lieth in wait to catch the poor: he doth catch the poor, when he draweth him into his net.
10 He croucheth, and humbleth himself, that the poor may fall by his strong ones.
11 He hath said in his heart, God hath forgotten: he hideth his face; he will never see it.
12 Arise, O Lord; O God, lift up thine hand: forget not the humble.
13 Wherefore doth the wicked contemn God? he hath said in his heart, Thou wilt not require it.
14 Thou hast seen it; for thou beholdest mischief and spite, to requite it with thy hand: the poor committeth himself unto thee; thou art the helper of the fatherless.
15 Break thou the arm of the wicked and the evil man: seek out his wickedness till thou find none.
16 The Lord is King for ever and ever: the heathen are perished out of his land.
17 Lord, thou hast heard the desire of the humble: thou wilt prepare their heart, thou wilt cause thine ear to hear:
18 To judge the fatherless and the oppressed, that the man of the earth may no more oppress.
Romans 10:13 For whosoever shall call upon the name of the Lord shall be saved.
Philippians 2:10 That at the name of Jesus every knee should bow, of things in heaven, and things in earth, and things under the earth;
Call on JESUS!
ONLY JESUS SAVES!
Does anyone actually take this guy seriously.
Jim Kramer couldn't find his way out of a wet paper bag, with a hole in the corner.. let alone be trusted for investing information.