Batista Brothers to Back Out of Talks for Banco Master Assets
By and Gerson Freitas Jr
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Joesley and Wesley Batista, the brothers who control meat giant JBS SA through their family holding J&F Investimentos SA, are no longer in talks to acquire some of Banco Master's assets amid lingering concerns over the lender's financial stability, according to people familiar with the matter.
Banco Master has been at the center of market turbulence in Brazil since it announced a merger with BRB SA, stoking concerns from the central bank and other financial companies that its potential liquidity shortfalls may require broad intervention. J&F had been in discussions with Banco Master owner Daniel Vorcaro about assets including a stake in mining company Itaminas, but ultimately deemed a deal too risky, one of the people said.
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New York Times
4 hours ago
- New York Times
DAZN will broadcast the Club World Cup around the world. What is the streamer's big idea?
Six months before the planned start of the Club World Cup came word that FIFA had finally found the grease to make its new wheels turn. A global broadcast partner had been secured and in its hands was the billion dollars that could be repurposed as a prize pot to demand the attention of the 32 competing teams. Advertisement FIFA called it a 'landmark agreement', the first of its kind. All 63 games in its expanded now-summer club competition would be made available free, with the body's president Gianni Infantino calling it the 'most widely accessible club football tournament ever'. The partner selected to make it all happen, though, raised eyebrows. DAZN might consider itself the only global sports streaming platform, dubbed the 'Netflix of Sport', but it was not a headline name for FIFA to have picked. In the United States and the United Kingdom, where it was founded in 2015, DAZN remains best known for boxing's big nights and pay-per-view events. In other parts of the world, including South America and Africa, it is unfamiliar to millions. All that is set to change in what DAZN's chief executive, Shay Segev, has predicted will be a 'transformational' year for the company. New audiences can be targeted and untapped markets explored. Or so goes the justification in giving FIFA $1billion (£736m) to screen a tournament of unknowns that will be over 29 days after it begins this weekend. 'We think it is good value for money,' DAZN's chief executive of growth markets, Pete Oliver, tells The Athletic at the company's headquarters in central London.'It's hard to know how big the Club World Cup will be, but we can see from the data already that it's not going to be small. It'll be big, it's just a question of how big.' DAZN, like FIFA, needs this new competition to work. It is among the biggest plays in its relatively short history as an ambitious broadcaster and a roll of the dice designed to increase its footprint around the globe. It is part broadcast deal, part promotional campaign. 'We don't see it as a risk, we see it as a very big opportunity,' adds Oliver. 'We think it will reposition the company quite significantly worldwide.' Follow the Club World Cup on The Athletic this summer… DAZN — it's pronounced 'da zone', for the uninitiated — has been a company of curiosity within the media industry since the platform was formed in 2015 as a product of Perform Group. Owned and funded by Sir Len Blavatnik's Access Industries Group, its plans have always been grand, to the point of eventually redesigning the sports broadcast landscape. DAZN does not hide its prediction that live sport will eventually come to viewers through dedicated digital platforms, following trends set by the music industry. Advertisement It is why DAZN regards itself primarily as a tech company but, within the industry that it wants to dramatically alter, plenty point to accumulated losses in chasing that vision. The group's most recent set of accounts, published in January, detailed funding commitments of $6.7billion from Blavatnik since DAZN's inception. There was $1.4bn lost in 2023 alone. The stark balance sheet deficits are a result of continued expansion in the costly world of football. As well as hoovering up domestic rights deals in major European territories, partnering with Serie A in Italy, Bundesliga in Germany and La Liga in Spain, DAZN had been the home of the women's UEFA Champions League until the arrival of Disney+ into the marketplace last month. Rights costs in 2023 ($3.1billion) exceeded the company's annual turnover, which had at least grown to $2.9bn. Blavatnik can wear the losses better than most. The Ukraine-born British-American businessman in control of DAZN had his wealth estimated to be $26.5billion by Forbes this year and is prepared to widen the company's frontiers. Three days before Christmas — and a matter of weeks after FIFA announced the Club World Cup deal — DAZN announced it had agreed to buy Australia's Foxtel Group from Rupert Murdoch's News Corp for $2.2billion. It was inward investment, though, that created greater headlines a month later. SURJ Sports Investment, controlled by Saudi Arabia's Public Investment Fund (PIF), bought a minority stake, said to be in single digits in terms of percentage, in DAZN for a reported $1billion to strengthen relations between the two. Rights for LIV Golf, football's Saudi Pro League and the various sports under the Riyadh Season banner had already been bought by DAZN, but it was the timing of that $1billion investment, the same figure that would go to FIFA for the Club World Cup, that drew scepticism. A financial, mutually beneficial triangle can be drawn without any assistance between FIFA, Saudi Arabia — which was announced in December as host of the 2034 men's World Cup — and DAZN. Advertisement 'The Club World Cup deal was done in December, Saudi investment came in February,' explains Oliver, who says negotiations with FIFA spanned between six and nine months. 'At the same time, we also bought Foxtel in Australia for $2billion. 'There were various things happening in the group. The Saudi investment was for plans in the MENA (Middle East and North Africa) region, and the Club World Cup was a separate decision reached last year.' Is the cynicism unfair? 'I think it is,' he adds. 'We've got a primary investor, Access Industries, which has funded the business with significantly more money than we've had from PIF. Multiple billions. We've had $1billion from PIF, but that's to launch in Saudi.' FIFA, regardless, was grateful DAZN's money came when it did. There had long been talk of Apple stepping up to become a streaming partner for the Club World Cup, but there was a reluctance within the industry to back a competition with neither heritage nor guarantees of engagement. Infantino went as far as calling a briefing with global TV executives last September in an attempt to drum up interest. 'The money they've had to cough up for the Club World Cup is astonishing,' says Paolo Pescatore, a media and telecoms analyst with over 30 years of experience. 'This is about DAZN putting a marker in the ground and saying, 'We want the mantle of being the global streamer of sports, and we're in a position to do it'. They'll see this as the tournament where they can do it, but, equally, there's a lot of hope in play here.' This, too, is a first for FIFA. The men's World Cup, the governing body's greatest asset, continues to see rights sold region by region, but a club event lacking the prestige and history of the UEFA Champions League was instead bundled up and sold off as one. 'There was nobody but DAZN, so they made a beautiful story of it with this $1billion to calm the clubs,' says Pierre Maes, a published author on the sale of sport TV rights. 'It's very convenient for FIFA. They sell to a broadcaster, who can broadcast the property in all of the countries but also, the broadcaster can act as an agency and sell the rights on to broadcasters. Advertisement 'DAZN solved a big headache for FIFA, but this property has a lot to prove. This feels to me like an opportunity for DAZN rather than a big strategic move.' DAZN has hedged its bets and opted against going it alone at the Club World Cup. Baked into the agreement with FIFA was the power to sublicense to regional markets, clawing back some of the initial investment. Deals have been struck with TNT in the U.S. and Channel 5 in the UK, ensuring a sizeable chunk of coverage will be shared with others. Channel 5, for example, will show the final and at least one semi-final among its broadcasts of the tournament. Oliver says 'hundreds of millions (of dollars)' have been recouped in that sublicensing process. 'That brings in revenue but also helps promote the tournament,' he says. Sluggish ticket sales in the U.S. would indicate promotion might be needed, but DAZN maintains that interest will not need to be manufactured. It sees the plot lines developing around Real Madrid, who will be led by new coach Xabi Alonso for the first time and include Trent Alexander-Arnold in their ranks, and the fiercely-supported clubs taking part, including Egypt's Al Ahly and the Argentine pairing of River Plate and Boca Juniors. 'We think the audiences for this will be very big — tens of millions, if not hundreds of millions,' says Oliver. 'We think over 100 million people will watch the Club World Cup, and we believe we can drive a lot of ad revenue. You'll see big sponsors and big advertisers on the feeds worldwide.' All 63 games of the Club World Cup will be available through DAZN's app, which is free to anyone who enters an email address and becomes a registered user. Paid subscribers (£24.99 a month in the UK, $19.99 in the U.S.) will see an uplift on their coverage, with improved picture and sound quality, while part of FIFA's arrangement is the incorporation of the body's in-house FIFA+ platform and all the content that it offers. A nagging question is DAZN's ability to cope with a new scale of demand on its platform this summer. Advertisement Major problems were encountered during the screening of Serie A games in 2021 and 2022, with viewers seeing feeds buffer and cut out. That brought criticisms from the Italian government and apologies from DAZN, which has not been alone in finding streaming issues for the most in-demand events. Netflix's broadcast of the Jake Paul versus Mike Tyson exhibition boxing match in November was overshadowed by technical problems during the 65million concurrent streams. DAZN, though, has confidence in its platform bearing the weight of its biggest numbers. 'We've built a new version of our platform specifically for the Club World Cup for free customers, and we've simulated 300million people watching at the same time,' says Oliver. 'We've made big investments in infrastructure to be ready for this. You never say never in the world of technology but we're pretty confident. We've built the platform, but also we're providing commentary in 17 different languages, because we're doing it globally. It's on a scale that no one else in sport has done before.' DAZN is nothing if not aspirational. In a company update from this January, Segev promised that DAZN was 'only getting started' and that 'ambitions are bigger than ever' in 2025. Forecast revenues have been set at $6billion for this year, doubling from 2023. Then there is the long-term target, said out loud, to reach a billion global users within the next decade — or, put another way, one in every eight people currently on the planet using DAZN on some level. Spotify, for some context, says it has close to 600million users. It is the scale of DAZN's plans, coupled with the heavy ongoing losses subsidised by Blavatnik, that is known to evoke the rolling of eyes. 'In our business, we have a lot of people looking at DAZN and asking themselves, 'What the f*** are they doing?',' says Maes. 'It's impossible to lose so much money. In the meantime, they are growing into one of the biggest companies in the UK. 'For the people who are trying to sell television rights, DAZN is an opportunity and a danger at the same time. It is an opportunity because in Europe today, it's the only ambitious sports-rights buyer. It's as simple as that. They're the only ones left. But it's a danger because these people have nearly $7billion of accumulated losses. Their future depends on the will of one man (Blavatnik) to put more money in.' Advertisement DAZN is not afraid to admit that football has to be central to its long-term growth. Eighty per cent of the app's viewing figures, it says, come from showing live matches. It is why it will remain a domestic partner of Italy's Serie A until at least 2029 and why it extended its arrangement with Germany's Bundesliga until the same point. DAZN also struck a five-year deal as a local provider for La Liga matches in Spain in 2022. Less harmonious was the arrangement with France's Ligue 1, severed inside a year, but other domestic partnerships can be found in Japan and Belgium. Those territories are where a substantial portion of DAZN's 20 million paid-for subscribers can be found. The Premier League, except for the rights to televise its games in Spain and Portugal, has eluded it. Aside from the proposed acquisition of BT Sport in 2022, which would later be sold to Warner Bros Discovery and rebadged as TNT Sport, there has been little prospect of televising Premier League matches in the UK and breaking Sky's stranglehold. The fifth-tier National League is the only long-standing partner of DAZN in English football. There are other key properties, including the NFL's Game Pass app in countries outside the United States, and a raft of boxing shows following link-ups with key promoters Golden Boy, Matchroom and Queensberry. The greatest challenge, however, is attracting and retaining subscribers. 'At the beginning of 2024, DAZN was talking about reaching break-even,' says Francois Godard, senior media analyst of Enders Analysis. 'That was the message. And then, this winter, it changed. They kept the message that they are doing better, but the main message was expansion. It shifted from a focus on break-even to a message of expansion. 'There was the deal in Australia and then the deal with the Saudis. That is probably allowing them to do the deal for the Club World Cup, which will allow them to gain prominence in many other markets where they had a lower profile, like the U.S. That was a big change in emphasis.' Advertisement So, how significant do the Club World Cup's global rights become to a project of this scale? 'To them, it's a publicity operation to reach out to people who have never heard of them,' Godard adds. 'They want to become a global platform, which is very tough in sports. The rights are almost always (sold) country by country. The Club World Cup will be free-to-air and it's a one-off. 'DAZN is a subscription service, so it needs subscribers all year round. But arguably there can be an overlap in terms of reach, and many platforms have a free tier where registration is required. Then it becomes easier to pitch a subscription to these customers.' That is undeniably part of the long-term strategy. The data of sports fans this summer will have enormous value to DAZN, an intangible byproduct of the $1billion investment. Forging the first links with FIFA will also carry benefits should the Club World Cup broadcast model be successful enough to be scaled-up at an event such as the 2034 World Cup, which is being hosted by, let us not forget, Saudi Arabia. DAZN will hope this is the start of something bigger with FIFA, but the path is not clear of competition. Netflix has already secured global rights for the Women's World Cup in both 2027 and 2031, and Disney's poaching of the UEFA Women's Champions League from DAZN next season illustrates the continued willingness of streaming giants to explore live sport. DAZN likes to stress it remains the only dedicated global sport platform, and for all the industry reservations, it does not deviate from a strategy that will quicken with this summer's Club World Cup. 'We're pretty clear on where we're going,' says Oliver. 'If you take a step back, you can see music has moved to a digital model. The sport industry hasn't got there yet. 'We're building a platform for that. We view that as a tech company, like YouTube or Spotify. We're building a platform. Advertisement 'If you go forward 10 or 20 years, way more sport will be delivered through a single platform on a global platform. You can see the traditional model in decline. No one else is building a dedicated sports app. We think the end-game is that we become the global home of sport.' The Club World Cup, for better or for worse, will go a long way to shaping DAZN's future. (Top photos: Getty Images; design: Kelsea Petersen)
Yahoo
5 hours ago
- Yahoo
Brown & Brown, Inc. announces pricing of $4 billion offering of common stock
DAYTONA BEACH, Fla., June 10, 2025 (GLOBE NEWSWIRE) -- Brown & Brown, Inc. (NYSE: BRO) ('Brown & Brown' or the 'Company') today announced the pricing of its public offering of 39,215,686 shares of its common stock (the 'common stock'), par value $0.10 per share, at a price to the public of $102.00 per share, for an aggregate offering amount of $4 billion. The offering is expected to close on June 12, 2025, subject to the satisfaction of customary closing conditions. In addition, the Company has granted the underwriters a 30-day option to purchase up to an additional $400 million in shares of common stock at the public offering price, less underwriting discounts. J.P. Morgan and BofA Securities are acting as lead book running managers of the offering. BMO Capital Markets and Truist Securities are acting as additional book running managers of the offering and Wells Fargo Securities, BTIG, PNC Capital Markets LLC, Fifth Third Securities, Morgan Stanley, Citizens Capital Markets, Barclays, Goldman Sachs & Co. LLC, Dowling & Partners and Raymond James are acting as co-managers of the offering. The Company expects that the net proceeds of the offering will be approximately $3.9 billion, after deducting underwriting discounts and expenses and assuming no exercise of the underwriters' option to purchase additional shares. The Company intends to use the net proceeds of the offering to fund a portion of the consideration payable pursuant to that certain agreement and plan of merger by and among RSC Topco, Inc., a Delaware corporation ('RSC'), the Company, Encore Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company, and Kelso RSC (Investor), L.P., a Delaware limited partnership, solely in its capacity as the equityholder representative, pursuant to which the Company will acquire RSC, the holding company for Accession Risk Management Group, Inc. (the 'Transaction'), and to pay fees and expenses associated with the foregoing. If the Transaction is not consummated, the Company intends to use the net proceeds of the offering for general corporate purposes. The Company has filed with the U.S. Securities and Exchange Commission (the 'SEC') an automatic shelf registration statement (including a prospectus) on Form S-3 dated May 5, 2023 (File No. 333-271708) and a related preliminary prospectus supplement, dated June 10, 2025, to which this communication relates, and the Company will also file a final prospectus supplement relating to the shares of common stock. Investors should read the preliminary prospectus supplement and base prospectus in the registration statement, including the information incorporated by reference therein, and the other documents the Company has filed with the SEC for more complete information about the Company and the offering. You may obtain these documents for free by visiting EDGAR on the SEC's website at Alternatively, a copy of the prospectus supplement relating to the offering may be obtained by contacting J.P. Morgan Securities LLC at J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by email at prospectus-eq_fi@ and postsalemanualrequests@ or BofA Securities, Inc. at BofA Securities, NC1-022-02-25, 201 North Tryon Street, Charlotte, NC 28255-0001, Attn: Prospectus Department, Email: This press release shall not constitute an offer to sell or a solicitation of an offer to buy the common stock of the Company, nor shall there be any sale of such securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The securities being offered have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the prospectus supplement or the shelf registration statement or prospectus relating thereto. About Brown & Brown, Inc. Brown & Brown, Inc. (NYSE: BRO) is a leading insurance brokerage firm providing customer-centric risk management solutions since 1939. With a global presence spanning 500+ locations and a team of more than 17,000 professionals, we are dedicated to delivering scalable, innovative strategies for our customers at every step of their growth journey. Forward-Looking Statements This press release contains 'forward-looking statements' within the 'safe harbor' provision of the Private Securities Litigation Reform Act of 1995, as amended. You can identify these statements by forward-looking words such as 'may,' 'will,' 'should,' 'expect,' 'anticipate,' 'believe,' 'intend,' 'estimate,' 'plan' and 'continue' or similar words. Brown & Brown has based these statements on its current expectations about potential future events. Although Brown & Brown believes the expectations expressed in the forward-looking statements included in this press release are based upon reasonable assumptions within the bounds of Brown & Brown's knowledge of its business and the transaction, a number of factors could cause actual results to differ materially from those expressed in any forward-looking statements, whether oral or written, made by Brown & Brown or on its behalf. Many of these factors have previously been identified in filings or statements made by Brown & Brown or on its behalf. Important factors which could cause Brown & Brown's actual results to differ, possibly materially from the forward-looking statements in this press release include, but are not limited to, the following items: (a) risks with respect to the timing of the Transaction; (b) the possibility that the anticipated benefits of the Transaction are not realized when expected or at all; (c) risks related to the financing of the Transaction, including that financing the Transaction will result in an increase in Brown & Brown's indebtedness and that Brown & Brown may not be able to secure the required financing in connection with the Transaction on acceptable terms, in a timely manner, or at all; (d) the unaudited pro forma condensed combined financial information reflecting the Transaction is based on assumptions and is subject to change based on various factors; (e) risks relating to the financial information related to RSC; (f) risks related to RSC's business, including underwriting risk in connection with certain captive insurance companies; (g) the risk that certain assumptions Brown & Brown has made relating to the Transaction prove to be materially inaccurate; (h) the inability to hire, retain and develop qualified employees, as well as the loss of any of Brown & Brown's executive officers or other key employees; (i) a cybersecurity attack or any other interruption in information technology and/or data security that may impact Brown & Brown's operations or the operations of third parties that support it; (j) acquisition-related risks that could negatively affect the success of Brown & Brown's growth strategy, including the possibility that Brown & Brown may not be able to successfully identify suitable acquisition candidates, complete acquisitions, successfully integrate acquired businesses into its operations and expand into new markets; (k) risks related to Brown & Brown's international operations, which may result in additional risks or require more management time and expense than Brown & Brown's domestic operations to achieve or maintain profitability; (l) the requirement for additional resources and time to adequately respond to dynamics resulting from rapid technological change; (m) the loss of or significant change to any of Brown & Brown's insurance company or intermediary relationships, which could result in loss of capacity to write business, additional expense, loss of market share or material decrease in Brown & Brown's commissions; (n) the effect of natural disasters on Brown & Brown's profit-sharing contingent commissions, insurer capacity or claims expenses within Brown & Brown's capitalized captive insurance facilities; (o) adverse economic conditions, political conditions, outbreaks of war, disasters, or regulatory changes in states or countries where Brown & Brown has a concentration of Brown & Brown's business; (p) the inability to maintain Brown & Brown's culture or a significant change in management, management philosophy or its business strategy; (q) fluctuations in Brown & Brown's commission revenue as a result of factors outside of its control; (r) the effects of significant or sustained inflation or higher interest rates; (s) claims expense resulting from the limited underwriting risk associated with Brown & Brown's participation in capitalized captive insurance facilities; (t) risks associated with Brown & Brown's automobile and recreational vehicle finance and insurance dealer services businesses; (u) changes in, or the termination of, certain programs administered by the U.S. federal government from which Brown & Brown derives revenues; (v) the limitations of Brown & Brown's system of disclosure and internal controls and procedures in preventing errors or fraud, or in informing management of all material information in a timely manner; (w) Brown & Brown's reliance on vendors and other third parties to perform key functions of its business operations and provide services to its customers; (x) the significant control certain shareholders have; (y) changes in data privacy and protection laws and regulations or any failure to comply with such laws and regulations; (z) improper disclosure of confidential information; (aa) Brown & Brown's ability to comply with non-U.S. laws, regulations and policies; (bb) the potential adverse effect of certain actual or potential claims, regulatory actions or proceedings on Brown & Brown's businesses, results of operations, financial condition or liquidity; (cc) uncertainty in Brown & Brown's business practices and compensation arrangements with insurance carriers due to potential changes in regulations; (dd) regulatory changes that could reduce Brown & Brown's profitability or growth by increasing compliance costs, technology compliance, restricting the products or services Brown & Brown may sell, the markets it may enter, the methods by which it may sell Brown & Brown's products and services, or the prices it may charge for its services and the form of compensation it may accept from its customers, carriers and third parties; (ee) increasing scrutiny and changing laws and expectations from regulators, investors and customers with respect to Brown & Brown's environmental, social and governance practices and disclosure; (ff) a decrease in demand for liability insurance as a result of tort reform legislation; (gg) Brown & Brown's failure to comply with any covenants contained in its debt agreements; (hh) the possibility that covenants in Brown & Brown's debt agreements could prevent Brown & Brown from engaging in certain potentially beneficial activities; (ii) fluctuations in foreign currency exchange rates; (jj) a downgrade to Brown & Brown's corporate credit rating, the credit ratings of Brown & Brown's outstanding debt or other market speculation; (kk) changes in the U.S.-based credit markets that might adversely affect Brown & Brown's business, results of operations and financial condition; (ll) changes in current U.S. or global economic conditions, including an extended slowdown in the markets in which Brown & Brown operates; (mm) disintermediation within the insurance industry, including increased competition from insurance companies, technology companies and the financial services industry, as well as the shift away from traditional insurance markets; (nn) conditions that result in reduced insurer capacity; (oo) quarterly and annual variations in Brown & Brown's commissions that result from the timing of policy renewals and the net effect of new and lost business production; (pp) intangible asset risk, including the possibility that Brown & Brown's goodwill may become impaired in the future; (qq) changes in Brown & Brown's accounting estimates and assumptions; (rr) future pandemics, epidemics or outbreaks of infectious diseases, and the resulting governmental and societal responses; (ss) other risks and uncertainties as may be detailed from time to time in Brown & Brown's public announcements and SEC filings; and (tt) other factors that Brown & Brown may not have currently identified or quantified. Assumptions as to any of the foregoing, and all statements, are not based upon historical fact, but rather reflect Brown & Brown's current expectations concerning future results and events. Forward-looking statements that Brown & Brown makes or that are made by others on Brown & Brown's behalf are based upon a knowledge of Brown & Brown's business and the environment in which it operates, but because of the factors listed above, among others, actual results may differ from those in the forward-looking statements. Consequently, these cautionary statements qualify all of the forward-looking statements Brown & Brown makes herein. Brown & Brown cannot assure you that the results or developments anticipated by Brown & Brown will be realized or, even if substantially realized, that those results or developments will result in the expected consequences for Brown & Brown or affect Brown & Brown, its business or our operations in the way it expects. Brown & Brown cautions readers not to place undue reliance on these forward-looking statements. All forward-looking statements made herein are made only as of the date of this press release, and Brown & Brown does not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which Brown & Brown hereafter becomes aware. For more information: Investors R. Andrew WattsChief Financial Officer(386) 239-5770 Media Jenny GocoDirector of Communications(386) 333-6066Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 hours ago
- Yahoo
StoneCo Ltd. (STNE): A Bear Case Theory
We came across a bearish thesis on StoneCo Ltd. (STNE) on Quipus Capital's Substack. In this article, we will summarize the bears' thesis on STNE. StoneCo Ltd. (STNE)'s share was trading at $13.51 as of 6th June. STNE's trailing and forward P/E were 11.42 and 9.68 respectively according to Yahoo Finance. StoneCo Ltd. (STNE), is deeply entrenched in Brazil's payment processing ecosystem, with a business model centered on receivables discounting rather than the processing layer, which has been heavily commoditized. STNE advances funds to merchants on credit card sales, earning high-yield, low-risk returns that are essentially underwritten by card issuers or networks. This model thrives among small businesses with limited credit access, where urgency often trumps cost. However, STNE's growth potential faces headwinds in the market: a saturated market growing only in line with GDP plus inflation, and a capped receivables base tied to one month's worth of payment volumes. Compounding this is the risk posed by PIX Parcelado, a government-backed initiative allowing installment payments directly via banks, which could disintermediate STNE from the receivables chain. While STNE has explored traditional credit markets, its previous attempts led to high delinquencies and an eventual retreat. The company lacks the competitive advantage to rival Brazil's full-service digital and incumbent banks. Despite these challenges, STNE remains highly profitable, and management is focused on balance sheet optimization through share buybacks and modest leverage. Assuming stable pricing and spreads, STNE can deliver around 11% from buybacks at a 9x P/E, and add another 5–7% from underlying economic growth. While the upside from fixed-multiple returns and efficient capital allocation is compelling, it's counterbalanced by the real possibility of margin erosion or disintermediation. For investors, the key question is whether these tailwinds are enough to justify the risk of business model disruption in an evolving payments landscape. Previously, we summarized a bullish thesis on SoFi Technologies, highlighting its rapid digital bank user growth, expanding product engagement, and forward profitability inflection, framing its 2026 earnings potential as a catalyst for valuation rerating. The stock has appreciated by approximately 4% since the recent coverage. Together, these two theses present a tale of fintech divergence: one banking on digital ecosystem scale and future earnings leverage (SoFi), the other navigating a legacy-dependent niche facing structural headwinds (StoneCo) StoneCo Ltd. (STNE) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held STNE at the end of the first quarter which was 24 in the previous quarter. While we acknowledge the risk and potential of STNE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
