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My worse move ever: bought 100 Mercadolibre (MELI) shares. They fell 10% in 3 hours! November 13, 2008

Posted by deminvest in growth stock, Internet stocks, investment, MELI, Mercadolibre, nasdaq, Nasdaq stock, Single stocks, stock I own, stocks.
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Will MELI be the Ebay of Latin America?

Will MELI be the Ebay of Latin America?

I am amazed by my incredibly wrong timing:

At 10:41:40 am Eastern time, I bought 100 MELI shares at $ 10.42 each.

At 01.00 pm my 100 MELI are worth $ 9.38 each. Down more than 10% in less than three hours.

Anyway. Why did I buy those 100 Mercadolibre shares?

Comments»

1. scubaxx - November 13, 2008

eComerce is still in an early age in LatinAmerica.
If the eCommerce powerhouses ( eBay , Amazon, Google )in the western economies (US, Canada, UK, Germany) are having a rough time I wouldn’t even look at this eCommerce platform focused on the LatinAmerican markets.

Where you looking for exposure to the Latinamerican markets? I wouldn’t even buy MELI @$2

AMX is @ a bargain now, so is CX or Grupo femsa (KO LatinAmerica branch)

Would you elaborate on your decision to invest in MELI ?

Kind Regards
Mauricio

2. deminvest - November 14, 2008

Mauricio,

I have been looking at Mercadolibre for more than a year. It was too expensive to buy until this crisis. Now, 75% below its IPO price, MELI isn’t expensive anymore🙂

I agree that Latin America is a dangerous place for investments right now. I did want Mercadolibre, not Latin America.

I did want it precisely because, as you wrote, “eComerce is still in an early age in LatinAmerica”. That fact implies that E-Commerce has a lot of room to grow in Latin America. I am very interested in the fact that Ebay does not operate in Latin America. Ebay does actually own a large share of Mercadolibre. Mercadolibre has, in Latin America, the same absolute market leadership on auctions that EBay enjoys in USA, Europe and Australia. Market leadership without real competition is something I love for a business with huge growth opportunities which is a early stages.

Not only it is very likely that on-line auctions and E-commerce will have tremendous growth in Latin America. It is actually happening right now, even in those times of horrible crisis on every other business:

Day before Yesterday Mercadolibre announced astonishing results for third Quarter: profit doubled, beating Analysts expectations, revenue went up 77%, driven by more sales and higher average volume for each sale.

Which other traded company in the World had such earning and sales boost in this time of global recession?

And I could buy such an high growth stock at a dirt cheap Forward P/E=16
which has a nice meaning for a company that proved to be able to beat analysts expectations even in such difficult times.

Mercadolibre also has its coffers filled with cash, about 10% of its market value is nice, pure cash: Total Cash: 49.42M

I hope that my mistake was the timing, not the stock-pick🙂

3. bebstar10 - November 20, 2008

hmmm good u clarified that it’s the bad timing.. u almost signalled that it was a bad stock-pick.. thanks.

4. deminvest - November 21, 2008

well bebstar, many investor who do a bad stockpick, blame it on bad timing…🙂

Only time will tell if that was or wasn’t the case🙂

5. My best move ever: bought 100 Mercadolibre (MELI) shares: up 40% in 3 weeks. « Democratic Investments by the people for the people - December 8, 2008

[…] investment, my free stock, nasdaq, stock I own, stocks. trackback Amazing… three weeks ago I wrote that Meli was my worse move ever. Today I hit my 40% up target, got my invested money back and kept my remaining Mercadolibre shares […]

6. bebstar10 - January 5, 2009

congratulations.. i hope the economy picks up in 18 months. it’s terrible to get wiped out in the books..


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