Market Movers - 24 August 2024
Stocks covered: ADYEN, NU, EVO, SE, MELI, APR.WA
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
Adyen New Partnerships
Nubank Lots and Lots of News
Evolution U.S Market Growth
Sea Limited Shopee Seller Summit Singapore 2024
MercadoLibre Launches Dollar-Backed Stablecoin
Auto Partner Hints at Another Hub
1. Adyen (ADYEN) New Partnerships
Partnership with PayPal to Offer Fastlane
PayPal and Adyen have expanded their global partnership to improve guest checkout experiences for businesses. Adyen will introduce "Fastlane by PayPal," a new guest checkout feature that significantly speeds up the checkout process, in the U.S., with plans for global expansion. Fastlane helps shoppers complete purchases faster by saving and auto-filling payment and shipping details, improving conversion rates by over 80%. This partnership strengthens both companies' offerings, with PayPal enhancing its presence in global e-commerce and Adyen providing better payment solutions for its enterprise clients.
Source: Adyen IR
Expanded Partnership with BMG
The expanded partnership between Adyen and BMW Group builds on their successful global e-commerce collaboration. Adyen has provided customized payment solutions that enhance BMW's customer engagement and shopping experience. Now, Adyen's point-of-sale solutions are integrated into BMW's ecosystem, allowing seamless and premium payment experiences both online and offline, including at BMW Welt and the BMW Museum.
Source: Adyen IR
Partnership with InvoiceASAP
Adyen and InvoiceASAP have partnered to provide small businesses with instant payment capabilities. Through this collaboration, InvoiceASAP will leverage Adyen's platform to allow users to sign up, sell, and get paid instantly. This partnership is supported by Adyen's use of the FedNow Service, a new instant payment system developed by the Federal Reserve, which aims to improve the speed and efficiency of money transfers.
InvoiceASAP's CEO highlighted that their goal is to offer the fastest bank deposits for their 23,000+ merchants by combining Adyen’s advanced payment products with new cash-out functionality. Adyen, which was one of the first fintech platforms certified to use FedNow, is utilizing this certification to help companies like InvoiceASAP enhance their payment processes.
Source: Adyen IR
My Perspective: Another week, and Adyen has announced three new partnerships. As we saw in the recent H1 2024 earnings review, Adyen is on fire. There has been a lot of misinformation online regarding the PayPal Fastlane partnership, so I want to clarify what it really means.
Adyen is a payments processor that offers an omnichannel platform with over 100 payment methods for merchants. The PayPal Fastlane partnership is simply an additional payment method added to Adyen’s offering. The more payment methods Adyen can facilitate, the stronger its competitive advantage becomes. Adyen doesn't care which payment method is used, as long as it's the one processing it.
Meanwhile, a competitor realizes that to succeed, it needs to be part of the Adyen ecosystem. A payment method is only as good as its availability and acceptance—distribution is king.
2. Nubank (NU) Lots and Lots of News
Nu Asset Advances in Institutional Market
Nu Asset, Nu’s investment fund manager, is entering the institutional investor market by partnering with Itajubá Investimentos, a leader in wholesale market distribution in Brazil. This partnership will focus on offering fixed-income products to Closed Supplementary Pension Entities and Proprietary Social Security Schemes, which represent a significant portion of Brazil's pension assets, largely invested in fixed income. The agreement with Itajubá Investimentos allows Nu Asset to leverage Itajubá's distribution network, accessing a market valued at around R$ 1.2 trillion in fixed-income investments.
Source: Nubank IR
Cuenta Nu Success in Colombia
Nu Colombia's launch of Cuenta Nu has seen significant success, with over 500,000 Colombians using the product to save for their financial goals. A key feature, "Cajitas," has enabled users to set aside money, resulting in the creation of around 600,000 of these savings compartments. By August 2024, Nu had attracted over US$450 million in assets, with 35,000 accounts opened in a single day, and US$15 million in deposits.
This success is attributed to Nu's response to the financial needs of Colombians, who face barriers to saving despite having strong financial goals, such as buying homes or securing retirement. A study by Ipsos for Nu revealed that low returns and high costs are significant obstacles to saving in Colombia.
Source: Nubank IR
NuConsignado Expands Payroll Loan Service
Nu has secured seven new agreements to expand its 100% digital payroll loan service, NuConsignado, which was launched in March 2023. The new agreements include partnerships with the three branches of the Brazilian Armed Forces, and the municipalities of São Paulo, Rio de Janeiro, and Belo Horizonte, as well as the state of Paraná. With these additions, Nu will have nine agreements in total, potentially reaching over 10 million customers out of its 95.5 million customer base in Brazil.
NuConsignado offers a quick and hassle-free digital process for payroll loans, which can be completed in under three minutes through the Nu app. The service boasts some of the lowest interest rates in the market—1.41% per month for public servants and 1.56% per month for INSS beneficiaries. Additionally, customers can easily port their existing payroll loans to Nubank through the app. The entire process, including identity and data verification, is conducted digitally, ensuring security and preventing fraud. By streamlining processes and reducing costs, Nubank has positioned itself as a competitive and safe option in the payroll loan market.
Source: Nubank IR
My Perspective: If Adyen is on fire, then so is NU! Not only is NU expanding geographically, increasing its total customer base, but it is also making strides to boost average revenue per active customer by expanding its service offerings. This combination makes NU an attractive investment, as it has many levers for growth.
3. Evolution (EVO) U.S Market Growth
Pennsylvania iGaming Revenue Update
Pennsylvania online casinos continue to generate substantial revenue, even during the summer months. In July, they earned $216.4 million in gross iGaming revenue, the third-highest amount on record. After a brief dip in June, the industry saw a strong rebound with a 10.6% increase from the previous month and a 37.7% rise compared to the same time last year. This marks the fifth time in the last six months that revenue exceeded $200 million.
Source: Play Pennsylvania
Michigan iGaming Revenue Update
Michigan's online casinos had their fourth-best revenue month ever in July, earning $191.4 million. This represents a 4.5% increase from June 2024 and a 25% increase compared to July 2023. July marked the eighth consecutive month with revenue exceeding $180 million. The highest revenue months in Michigan iGaming history were March, May, and April of 2024. So far, in 2024, online casino revenue has totaled $1.35 billion, averaging over $193 million per month. PlayMichigan projects a record-breaking year with over $2.32 billion in total revenue, surpassing the $1.92 billion earned in 2023.
Source: Play Michigan
New Jersey iGaming Revenue Update
NJ online casinos earned $195.4 million in July, marking the second-highest monthly revenue in the state's history, just shy of the March 2024 record of $197.2 million. This represents a 25.9% year-over-year increase in revenue, from $155.2 million in July 2023. July 2024 revenue was up 4% compared to June 2024, continuing a decade-long trend of July outperforming June. The five highest revenue months for NJ's iGaming have all occurred in the last five months, indicating a strong upward trend.
Source: Play NJ
My Perspective: The strong market growth in the US is a very positive sign for Evolution. It not only highlights the growth prospects in states that have already legalized iGaming, which is still in its infancy, but also shows prospective state legislators the potential tax revenue they could generate by following suit.
4. Sea Limited (SE) Shopee Seller Summit Singapore 2024
Shopee's Seller Summit Singapore 2024 highlighted key strategic initiatives aimed at empowering sellers and boosting their business growth on the platform. Key insights include:
Enhanced Seller Tools: Shopee introduced upgraded resources like platform vouchers, Coins Cashback Program, and daily vouchers, which have been shown to increase sales by up to 2.3 times. Sellers benefit from these tools along with preferential shipping rates, helping them attract more customers.
Improved Fulfillment Services: To meet the growing demand for faster delivery, Shopee has expanded its Next Day Delivery services and upgraded facilities. They now offer reduced shipping fees and have introduced a Buyer Compensation program for late deliveries, enhancing buyer satisfaction and seller competitiveness.
Increased Sales Opportunities: Shopee has extended key sales campaigns, such as 9.9 and 11.11, from one day to three, providing sellers with more opportunities to boost sales. Discount packages of up to 40% and an increase in discount and cashback vouchers are also being offered to attract more buyers.
Buyer Engagement Initiatives: Shopee's investment in livestreaming and its Affiliate Network has seen significant growth, with a 700% increase in daily livestream orders. Sellers can engage directly with buyers through Shopee Live and leverage the platform's extensive Affiliate Network to reach a broader audience.
Success Stories: Sellers like Genecia Alluora of Alluora skincare and Skechers have thrived on Shopee, attributing their success to the platform's user-friendly interface, marketing tools, and extensive customer base.
Source: The Sun
My Perspective: I am impressed with the moves Shopee is making to help sellers optimize sales, reduce costs, and expand their reach, ultimately supporting their growth in the competitive e-commerce market. As Shopee offers a two-sided marketplace for buyers and sellers, it is crucial to keep both sets of stakeholders satisfied.
5. MercadoLibre (MELI) Launches Dollar-Backed Stablecoin
MercadoLibre's fintech arm, Mercado Pago, has launched a stablecoin called Meli Dolar, which is pegged to the U.S. dollar at a one-to-one value, in Brazil. This move is part of their strategy to expand their crypto offerings, as they already allow trading of cryptocurrencies like Bitcoin and Ether. The stablecoin can be traded through Mercado Pago's app, and no fees will be charged for these transactions. The stablecoin will be managed in partnership with the crypto platform Ripio, which will act as an exchange and market maker. This launch builds on MercadoLibre's earlier crypto initiatives, including the 2022 introduction of MercadoCoin in Brazil as part of a loyalty program.
Source: Reuters
My Perspective: Brazil has seen a surge in crypto trading this year, with stablecoins leading the market. The new stablecoin will provide an alternative for customers seeking to protect their purchasing power from exchange rate fluctuations.
6. Auto Partner (APR.WA) Hints at Another Hub
Auto Partner aims to maintain its current sales momentum through 2024, despite the absence of last year's inflationary boost. The company reported strong sales growth in July 2024, with a 20.15% increase, leading to cumulative revenues of PLN 2.43 billion for the first seven months of the year, a 16.53% year-over-year increase.
The company is also planning to expand its operations by opening a new warehouse in Zgorzelec by early 2026 and is considering an additional, smaller hub near Poland's western border. Despite price reductions from some suppliers, which are affecting product margins, the vice president Piotr Janta views these changes as temporary, anticipating a shift due to rising freight costs. Auto Partner continues to expand its presence, with 116 branches in Poland and plans to open more by the end of 2024.
Source: PAP Biznes
My Perspective: This is the first time a smaller hub near Poland’s western border has been disclosed. In my opinion, this is a bullish signal, as investing in additional hubs suggests that demand is not slowing.
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Happy investing
Wolf of Harcourt Street
Contact me
Twitter: @wolfofharcourt
Email: wolfofharcourtstreet@gmail.com
Great update. How did you find the news article for $APR? Are you polish? or do have you set up news alerts? Thank you as always !