Why MercadoLibre shares soared 14.1% in July

What happened

Actions of Free Mercado (NASDAQ: MELI) rose 14.1% in July, according to data provided by S&P Global Market Intelligence.

Since the start of the year, shares of the e-commerce company have climbed 84.3% while hitting new all-time highs, giving the company a market cap of nearly $ 56 billion.

Image source: Getty Images.

So what

COVID-19 has been a boon for the fintech company as physical transactions are avoided and more people and businesses turn to e-commerce and digital payments. MercadoLibre was already growing at a breakneck pace before the coronavirus hit, with net sales growing 70% year-over-year for the first quarter of 2020 to $ 652 million, while volume Consolidated gross merchandise increased 34% year over year. The number of items sold increased 28% year-on-year in the first quarter. For Latin America, there is room for much more growth as online shopping hit a new all-time high in June, when 13 million consumers made an online purchase for the first time.

The company does not stand still, however. At the end of July, he launched a new debit, credit and prepaid card reader for merchants called Point Plus. Point Plus would offer greater autonomy to the merchant since he can carry out all collections directly from the terminal, without the need for a mobile phone. MercadoLibre eliminates these issues to attract more potential customers, as this solution is primarily aimed at small businesses and freelance workers.

MercadoLibre has also announced that it will integrate Pay Pal (NASDAQ: PYPL) as a payment option in Brazil and Mexico. The integration allows consumers to use PayPal on the MercadoLibre platform from anywhere in the world as long as the delivery destination is Brazil or Mexico. The move follows a partnership the company sealed with PayPal in December last year and will help expose MercadoLibre to a wider international audience.

Now what

Earlier this month, the company entered into a partnership between Mercado Pago, its fintech and payments arm, and Telefonica Brazil, a telecommunications company in Brazil. The deal means that customers of the phone company’s prepaid and hybrid plans who are also Mercado Pago digital wallet holders will be able to reload their cards using their Mercado Pago accounts.

These numerous partnerships and collaborations will help extend the reach of the company and allow it to expand its customer base. In turn, these new customers will drive increased merchandise and payment volumes through MercadoLibre’s platform, allowing the company to generate further growth.

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