What happened?
Shares of latin American e-commerce and fintech company MercadoLibre (NASDAQ: MELI) fell 11.3% in the morning session after Brazilian President Luiz Inácio Lula da Silva secured an unexpected runoff victory over conservative challenger Flávio Bolsonaro, reversing weeks of rallies driven by expectations of a business-friendly administration.
Lula secured 51.8% of valid votes against Bolsonaro's 48.2%, based on official electoral tallies cited by TipRanks. Investors had favored Bolsonaro on expectations that his platform of government spending restraint and corporate tax reductions would rein in public debt and permit the central bank to cut borrowing costs, Investing.com reported. Brazil is MercadoLibre's largest geographic market, generating $5.53 billion, or 54.4%, of the company’s $10.17 billion in total net revenues and financial income in the second quarter, according to its Form 10-Q quarterly filing with the U.S. Securities and Exchange Commission.
Because MercadoLibre reports in U.S. dollars, a depreciating real directly reduces the translated value of its Brazilian marketplace and payments income, while elevated domestic interest rates increase funding costs and bad-debt risks across its Mercado Pago credit portfolio.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy MercadoLibre? Access our full analysis report here, it’s free.
What is the market telling us
MercadoLibre’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. But moves this big are rare even for MercadoLibre and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 12.3% on the news that the company reported first-quarter 2026 results where strong revenue growth was overshadowed by declining profitability, sparking investor concerns about rising costs.
MercadoLibre is down 17.9% since the beginning of the year, and at $1,620 per share, it is trading 31.4% below its 52-week high of $2,361 from October 2025. Despite the year-to-date decline, investors who bought $1,000 worth of MercadoLibre’s shares 5 years ago would now be looking at an investment worth $1,049.
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