What happened
Shares of Brazilian fintech Nu Holdings (NU 1.24%) closed Thursday's trading session up by 11.5% for no obvious reason, although the price move could have been tied to some big investors recently disclosing stakes in the company, which only went public a few months ago.
So what
Nu bucked the broader market trend as stocks lost ground amid fears about Russia's possible plans to invade Ukraine. On Wednesday, it looked like Russian President Vladimir Putin was making moves to reduce tension, and the market reacted positively. But with Washington now saying that Russia's military has actually increased the size of its troop deployment, concerns about an invasion are rising again.
It's possible Nu Holding's share price rise may have been driven by recent disclosures from Berkshire Hathaway and Tiger Global Management that they had taken positions in the company. But this explanation doesn't fully add up.
Image source: Getty Images.
In June, Berkshire Hathaway reported that it had invested $500 million in Nu when the company had a valuation of about $30 billion. Then when Nu went public, Buffett's company purchased another $250 million worth of shares at a $41.5 billion valuation. So the fact that Berkshire Hathaway disclosed a stake in Nu worth a little more than $1 billion in its most recent 13F filing was likely just a reflection of shares we already knew the company owned.
The news about Tiger Global Management acquiring nearly 266 million shares looks brand new, but it also came out a few days ago. Perhaps investors are just starting to learn about the Brazilian company, which may have not previously been on their radars.
Now what
Nu's digital banking app has greatly disrupted the banking scene in Brazil and other parts of Latin America by making it easier for consumers to sign up for basic services with lower fees. The fintech company has quickly amassed more than 48 million users.
There may not have been an obvious catalyst for Thursday's gain, but Nu recently announced it will report its fourth-quarter and full-year earnings on Feb. 22, so there is an upcoming catalyst.
It's clear that the company has huge potential, although right now, I have my doubts about its $46.5 billion market cap. But perhaps Nu's upcoming report will change my opinion.
