Brazilian digital bank Nubank slashed its US stock market debut target price by around 18% in global tech stock sale that impacts initial public offerings (IPOs) at the end of the year, Reuters reported on Tuesday (November 30).
Nubank, backed by Warren Buffett’s Berkshire Hathaway, had forecast an IPO valuation of more than $ 50 billion, based on a record boom in U.S. capital markets, according to the report.
However, rising Treasury yields soured investors in major tech stocks, according to the report. Additionally, the omicron variant of COVID-19 has people worried about new damage from the pandemic.
Nubank has filed an amended filing with the Securities and Exchange Commission (SEC) that says it now plans to sell 289.2 million shares at $ 8 to $ 9 each, according to the report. The company aims to raise up to $ 2.6 billion at a valuation of $ 41.5 billion. The Sao Paulo-based company originally planned to raise $ 3 billion, selling shares for between $ 10 and $ 11 apiece.
Founded in 2013, Nubank started out as a credit card issuer that charged no annual fees. It has since gained more than 48 million customers and unveiled products that include loans and checking accounts, according to the report.
The company mainly derives its money from fees paid by merchants when customers transact, according to the report.
Last month, Nubank announced that it had succeeded in making a profit in the first half of its operations in Brazil.
Read more: Nubank IPO filing, valuation highlights Neobank’s exciting growth expectations
Nubank’s planned IPO comes shortly after several major public offerings this year, such as Rivian Automotive, Didi Global and Coupang, as well as major FinTech players such as Robinhood and Coinbase, according to the report.
While U.S. IPOs have garnered a record $ 275 billion this year, investors have been reluctant to invest their money in some Latin American FinTechs after Brazilian payments firm StoneCo reported massive losses in its latest. results, with stocks down more than 80% this year. , according to the report.