Market Movers - 18 January 2025
Stocks covered: EVO, NU, SE, AMZN, MELI, INPST
Welcome back to the Wolf of Harcourt Street Newsletter.
Market Movers is your time-saving guide to crucial stock news, cutting through the noise.
With all that being said, let’s dive into today’s edition!
Todays Agenda
Evolution A Whirlwind Week of News
Nubank Mexico Partnership with OXXO & USDC Rewards Expansion
Sea Limited SeaMoney to Offer Motor Insurance
Amazon AWS Launches $5 Billion Cloud Region in Mexico
Mercado Libre Leads Retail Media in Latin America
InPost to Invest £600 million in the UK
1. Evolution (EVO)
Thailand Approves Casino and Gambling Law
Thailand's cabinet has approved a bill to legalize entertainment complexes with gaming, moving it to parliament for final approval. If passed, the law could come into effect within 7–9 months, with the first complexes opening by 2029.
A government study projects that these entertainment complexes could generate 406.6 billion baht ($12 billion) in tourism revenue in their first year, create up to 20,000 jobs, and increase tourist arrivals by 5–10% during the low season—resulting in a 13% rise in overall tourism revenue. This initiative aims to revitalize Thailand’s economy, which is still recovering from the COVID-19 pandemic.
Thailand could potentially outpace Japan, with its first casino projected to open before Japan's MGM Osaka in 2030. Five casinos are planned in key locations: Bangkok (2), Chiang Mai, Phuket, and the Eastern Economic Corridor. Seven international operators, including Melco Resorts, MGM Resorts, Galaxy Entertainment, and Genting Berhad, have expressed interest in obtaining licenses.
Source: iGB
My Perspective: Of particular interest to Evolution shareholders are the comments from former Prime Minister Thaksin Shinawatra, who advocates for legalizing and taxing online gaming. This reform could generate 100 billion baht ($3 billion) annually from a 20% tax. Draft rules for online gambling reform are expected to be ready within a month.
Wyoming and Indiana Introduce Bills to Legalise Online Casinos
Wyoming and Indiana are the latest states considering the legalisation of iGaming, reflecting growing efforts to regulate online gambling across the U.S.
Wyoming: House Bill 162 requires operators to obtain licenses with fees of $100,000 for initial licensing and $50,000 for renewals. A 16% tax on monthly gaming revenue would fund county health programs, schools, and state initiatives.
Indiana: House Bill 1432 permits licensed riverboats, racetrack casinos, and gaming permit holders to offer iGaming. Taxes on adjusted gross receipts range from 22% to 30%, with funds allocated to local services, horse racing, and gambling addiction programs.
Source: Next
My Perspective: Previous efforts to legalize online gambling have been unsuccessful, so this is far from a done deal. Progress has been hindered by the fallout from a 2023 corruption case involving former legislator Sean Eberhart, who was convicted of fraud related to gambling legislation.
Wyoming and Indiana are at different stages of regulating iGaming. Wyoming emphasizes a structured and conservative rollout, while Indiana faces challenges stemming from legislative scandals.
Investigation by the Swedish Financial Supervisory Authority
Evolution has received a request from the Swedish Financial Supervisory Authority (FI) regarding a press release issued on December 20 last year. The release, titled "Regarding the UK Gambling Commission's Investigation," announced that Evolution’s games were accessible in the UK through operators without a British license, prompting an investigation.
Evolution deemed this information as market-sensitive insider information. Documents reviewed by Dagens Industri reveal that FI’s case involves Evolution’s decision to delay the disclosure of insider information. Evolution was informed of the investigation at 5 PM on December 19 but did not inform the market until 5:45 PM on December 20—more than a day later.
Under the EU Market Abuse Regulation (MAR), companies may delay disclosure of insider information under certain conditions, provided the delay does not mislead the public. The decision to delay disclosure was made by Chief Financial Officer Jacob Kaplan, who, according to documents, played a central role. Notably, Kaplan's departure from the company was announced on January 7, with Joakim Andersson appointed as the new CFO effective February 18.
Source: Dagens Industri
My Perspective: This investigation raises further compliance concerns for Evolution. While EU MAR permits delayed disclosure under specific conditions, we must wait to see if these conditions were met. Dagens Industri suggests that the decision to delay disclosure was tied to outgoing CFO Jacob Kaplan. Was this merely a coincidence, or did it play a role in his departure? As always, there’s never a dull moment with Evolution!
2. Nubank
NU México Partnership with OXXO
Nu México has partnered with OXXO, a leading small-format store chain with over 22,000 locations across Mexico. Starting January 14, 2025, Nu cardholders will be able to withdraw cash at OXXO stores, with a cash deposit featurelaunching later in the year.
This partnership aims to promote financial inclusion in areas underserved by traditional banks, addressing the ongoing reliance on cash for millions of Mexicans. The addition of OXXO complements Nu’s existing network of over 30,000 physical contact points, which includes major chains like Soriana, Chedraui, Kiosko, and Systienda, supported by Arcus by Mastercard infrastructure.
Source: Nubank IR
My Perspective: Mexico remains a predominantly cash-based economy, presenting both a significant opportunity and a challenge for Nubank. The opportunity lies in the expected growth of digital payments over time. However, the immediate challenge is transitioning this cash onto the Nubank ecosystem. The partnership with OXXO is a practical step in bridging this gap. It enables Nubank cardholders paid in cash to deposit their earnings into their Nubank accounts through OXXO’s widespread network.
USDC Rewards Expansion
Nubank has expanded its USDC rewards feature to all Nubank Cripto users in Brazil following a successful pilot program. Users can now earn daily returns at a fixed annual rate of 4% on a minimum balance of 10 USDC.
USDC is a stablecoin backed by US dollars, with reserves that are publicly verifiable and redeemable at a 1:1 ratio, offering significantly less volatility compared to other cryptocurrencies.
The program is highly flexible, allowing users to activate or deactivate participation directly through the app. Returns are automatically credited daily, with funds immediately accessible.
In 2024, USDC holdings by Nubank customers grew tenfold, with approximately 30% of users holding USDC in their portfolios. Additionally, over 50% of new Nubank Cripto users selected USDC as their first cryptocurrency.
Source: Nubank IR
My Perspective: Nubank’s USDC offering has gained substantial traction in Brazil, driven by its appeal as inflation protection. With Brazil’s inflation rate at 4.8% in 2024, USDC provides Brazilians with a stable store of value, functioning as a digital dollar that shields savings from local currency depreciation
3. Sea Limited (SE) SeaMoney to Offer Motor Insurance
SeaMoney has partnered with Takaful IKHLAS to offer Shariah-compliant motor protection through the Shopee app. The product, IKHLAS Private Car Comprehensive Plus Takaful, is part of Shopee's growing suite of digital insurance and takaful services—a form of insurance based on mutual assistance and Sharia law.
This motor takaful offering aligns with Islamic law, which prohibits interest payments and investments in sectors like gambling, alcohol, pork production, and non-Islamically structured finance or life insurance.
Customers can easily purchase motor takaful protection directly via the Shopee app, simplifying the process and providing peace of mind with minimal effort.
Source: Middle East Insurance Review
My Perspective: The launch of Shariah-compliant motor protection further broadens SeaMoney’s service offerings, which already include ShopeePay (digital wallet), SPayLater (consumer financing), micro-lending, and insurance distribution via SeaInsure Agency Malaysia. This diversification strengthens SeaMoney’s position as a leading digital financial services provider in the region.
4. Amazon (AMZN) AWS Launches $5 Billion Cloud Region in Mexico
AWS has announced an investment of over $5 billion in Mexico over the next 15 years, underscoring its long-term commitment to the region. This initiative is expected to contribute approximately $10 billion to Mexico’s GDP during its lifecycle and support more than 7,000 full-time equivalent jobs annually. These roles will span construction, facility maintenance, engineering, and telecommunications.
The new AWS Mexico Region offers cutting-edge cloud technologies, including AI, machine learning, and IoT, empowering businesses, governments, and organizations to innovate and scale efficiently. This region joins AWS’s global network, which now comprises 114 Availability Zones across 36 geographic regions, with further expansion planned in New Zealand, Saudi Arabia, Taiwan, and Europe.
Source: Business Wire
My Perspective: This is undeniably positive news for Amazon shareholders, but it also bodes well for companies with exposure to Mexico’s economy, which is poised for significant growth. Nubank and Mercado Libre, I’m looking at you.
5. Mercado Libre (MELI) Leads Retail Media in Latin America
Mercado Libre is recognized as a leader in retail media across Latin America, with its advertisements ranked as the most useful and relevant in the region, according to Kantar Media Reactions 2024. It also ranks among the top three preferred online platforms for receiving ads, while Mercado Pago is included in the top five.
Retail media—particularly ads on e-commerce platforms—has become a favored advertising channel in Latin America, second only to influencer content. A staggering 83% of Latin Americans use Mercado Libre to shop, compare prices, and explore promotions. Moreover, 8 out of 10 users conduct general searches to discover options rather than focusing on specific brands.
Mercado Libre and Mercado Pago ads are highly valued for their usefulness, reliability, quality, ability to capture attention, and relevance. Notably, 82% of users find these ads helpful in discovering brands and products and resolving doubts about potential purchases.
Source: America Retail
My Perspective: The statistic that 83% of Latin American users rely on Mercado Libre for shopping, price comparisons, and promotions is remarkable. This underscores the likelihood that the market understates the value of Mercado Ads, its digital advertising unit. Mercado Libre’s ad ecosystem enables end-to-end optimisation of the purchase process, solidifying its position as a key partner for advertising strategies in Latin America.
6. InPost (INPST) to Invest £600 million in the UK
InPost has announced plans to invest nearly £600 million in the UK, raising its total investment in the region to £1 billion by the end of 2029. This expansion is expected to create up to 12,000 new jobs, solidifying the UK as InPost’s fastest-growing market.
The company aims to increase the number of automated parcel machine (APM) locker sites by over 50% in 2025, catering to surging consumer demand. By the end of 2024, InPost had already invested £426 million in the UK and established over 13,000 out-of-home delivery points. Looking ahead, it plans to add 5,000 more APM units in 2025.
Source: Reuters
My Perspective: As I’ve previously discussed with companies like Amazon, Mercado Libre, and Sea Limited, building a logistics moat requires significant investment—exactly what InPost is doing. These early investments are already yielding results: parcel deliveries in the UK doubled in 2024 to 93.2 million, showcasing the growing demand for InPost’s services.
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Happy investing
Wolf of Harcourt Street
Contact me
Twitter: @wolfofharcourt
Email: wolfofharcourtstreet@gmail.com
Enjoying these updates. Evolution investigation is interesting. Why were compliance, internal legal counsel (and potentially their house broker) not recommending a faster announcement? I still think having a new CFO lined up means the change of CFO must have been in the plans for sometime. Bigger picture though, it feels as if Evo needs to invest more in its compliance / regulatory function which will likely be negative for margins.