MercadoLibre Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of MercadoLibre (Nasdaq: MELI  ) fell as much as 13.6% after reporting second-quarter results that came up short of Wall Street's expectations.

So what: Analysts were expecting MercadoLibre, Latin America's version of eBay, to report $0.38 per share of earnings on $69 million in revenue. Instead, the company booked $0.34 of profit on $69.4 million of revenue. MercadoLibre had beaten estimates in each of the past four quarters.

Now what: According to Investor's Business Daily, the stock was off 3% in last night's after-hours trading. The implication? Today's sell-off, while painful, probably has a lot more to do with a broad market meltdown than the auctioneer's results. Consider buying if you still believe in the long-term growth story. Do you agree? Disagree? Weigh in using the comments box below.

Interested in more info on MercadoLibre? Add it to your watchlist.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

Motley Fool newsletter services have recommended buying shares of MercadoLibre and eBay. Motley Fool newsletter services have recommended shorting MercadoLibre. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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