Nubank (NU) IPO: Price, lot size, and how to buy the stock?

Highlights

  • The US capital markets have seen a record-breaking boom this year as the economy progressed rapidly from a covid-induced downturn.

  • Technology stocks have seen selloffs lately amid mixed global cues, including the threat from the new covid variant Omicron.

  • In a revised filing with the US market regulator SEC on Tuesday, Nubank said it plans to offer 289.2 million shares for US$8 to US$9 each.

Brazilian digital bank Nu Holdings Ltd or Nubank is all set to launch its initial public offerings (IPO) in the US. The Nubank IPO is one of the most-awaited public offerings this year.

On Tuesday, the Sao Paulo-based company slashed its IPO valuation target to about US$40 billion, or about 18% from its targeted price range, in view of the latest market developments.

Technology stocks have seen selloffs lately amid mixed global cues, including the threat from the new covid variant Omicron. Additionally, a recent rise in Treasury yields has dampened the outlook for major tech stocks. The company had earlier aimed for a valuation of about US$50 billion.

In a revised filing with the Securities and Exchange Commission (SEC), the US market regulator, Nubank said it now plans to offer 289.2 million shares for US$8 to US$9 each. The company would now raise US$2.6 billion at a valuation of US$41.5 billion at the top end of the offer price.

Even at the lower price band, Nubank would be worth more than Brazil’s largest lender Itau Unibanco Holding which has a market cap of US$37.5 billion, say analysts.

The lead underwriters of the offering are Goldman Sachs, Citigroup, Morgan Stanley, and NuInvest. In addition, brokerages like SoftBank Latin America Funds, JPMorgan, Dragoneer, Morgan Stanley, and Sequoia Capital are expected to buy shares worth at least US$1.3 billion, the company said.

The IPO comes on the heels of several big public offers this year, including Coupang, Didi Global, Rivian Automotive, and fintech giants like Robinhood Markets Inc and Coinbase.

According to data firm Dealogic, around US$275 billion were raised in US IPOs so far this year.

Also Read: US stocks retreat on Omicron, inflation fears

Nubank IPO: How to buy the stock?

 Source: Pixabay

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Nubank’s business

The Sao Paulo-headquartered Nubank was founded by Stanford-educated David Velez in 2013. Nubank initially issued credit cards with no annual fee. Today, it has various financial products, including loans, and serves more than 48 million customers.

Nubank earns its revenue mainly through merchant fees for transactions.

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Bottomline

The US capital markets have seen a record-breaking boom this year as the economy progressed by leaps and bounds from a covid-induced downturn. The quarterly earnings of fintech companies and the heavyweight traditional leaders rose noticeably in the second and third quarters of fiscal 2021, lifting the indices to record highs.

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