What happened
Shares of fintech StoneCo (STNE 2.52%) are soaring, rising by nearly 15% as of 11:45 a.m. EST on Tuesday. The company announced third-quarter earnings that were at the high end of its preliminary results detailed in its pre-IPO prospectus.
So what
StoneCo makes its money by facilitating digital payments in Brazil, where digital and card-based payments technology lags behind developed markets. Before the company went public on Oct. 25, its prospectus detailed its preliminary results for 2018, giving investors a look ahead into its third-quarter earnings report.
Image source: Getty Images.
The table below compares its actual results for the third quarter with the preliminary results detailed in its prospectus. All figures below are in Brazilian real (BRL).
|
Metric |
Preliminary estimates (BRL) |
Actual (BRL) |
|---|---|---|
|
Total revenue |
414.1 million ($106.6 million) |
414.1 million |
|
Net income |
84.3 million to 90.5 million |
90.4 million |
|
Adjusted net income |
83.1 million to 89.3 million |
89.3 million |
| Total payments volume |
21.8 billion |
21.8 billion |
Data source: StoneCo prospectus, form 6-k.
On every metric, StoneCo's results were at or near the high end of its preliminary earnings results, enough to send the stock rising today.
Now what
Admittedly, it's a little strange to see StoneCo surge on earnings results that were effectively announced roughly one month ago. But with a small float, it doesn't take much to send shares moving.
This isn't the first time that StoneCo's stock has moved on stale news. Its prospectus before the IPO said that Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) planned to buy roughly 14.17 million shares of its stock. But StoneCo's shares jumped about 4.9% anyway when Berkshire's 13F was filed earlier this month, detailing that it did, in fact, buy all those shares.
I guess you could say that double-dipping on good news is nothing new for StoneCo.
