MELI
The market hit the panic button
MercadoLibre just got the classic "growth stock tax" treatment: a 13% post-earnings selloff because margins are getting squeezed. But the thesis here is basically: relax, this is what happens when a company is pouring gasoline on the growth engine.
What’s actually happening
The numbers behind the noise are still pretty juicy. Commerce revenue rose 47% year over year, while fintech revenue jumped 51%. That’s not a company losing steam — that’s a company still running hot, just while stepping on the investment accelerator.
The margin pressure is coming from a few familiar culprits:
- expanded free shipping
- faster-growing credit portfolio exposure
- heavier logistics capex
In plain English: MercadoLibre is spending now to make the platform stickier later. Investors don’t always love that in the moment, because it means near-term profits take a nap while the long-term story gets stronger.
Why you should care
The encouraging bit is that unit shipping costs and engagement metrics are improving, which is the kind of behind-the-scenes evidence bulls want to see. If the customer experience gets better while growth stays this strong, the selloff could end up looking less like a warning sign and more like a clearance sale.
Big picture: this is the eternal growth-stock tradeoff — ugly margins today, bigger moat tomorrow. If the investments keep paying off, the market may eventually stop flinching every time MELI chooses growth over short-term prettiness.