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‘Amazon of Argentina’ Stock Plunges as Fernandez Win Shocks Market

Last Updated September 23, 2020 12:53 PM
Josiah Wilmoth
Last Updated September 23, 2020 12:53 PM

Argentine markets suffered what can only be characterized as a bloodbath  on Monday, subjecting the peso, bonds, and local stocks to brutal declines.

The reckoning spread beyond the shellshocked country’s borders, and one Nasdaq-listed firm dubbed the “Amazon of Latin America” suffered a merciless correction.

Populist Alberto Fernandez Creams Mauricio Macri in Argentine Primaries

Argentina’s stock market plunge immediately followed Alberto Fernandez’s shocking victory  in the country’s presidential primaries.

The center-left populist Fernandez – whose running mate is notorious former president Cristina Fernandez de Kirchner – threatens to unseat market-friendly President Mauricio Macri when voting begins on October 27.

Fernandez and Kirchner scored an impressive 47.7% of the vote, with Macri and his running mate – Miguel Angel Pichetto – finishing a distant second with 32.1%. Though largely symbolic, the vote doesn’t bode well for the incumbent’s odds two months from now.

MercadoLibre Stock Plunges More Than 10%

A center-left populist administration could roil MercadoLibre’s fantastic growth rate. | Source: Shutterstock

The primary vote’s fallout rippled throughout the global markets, one ingredient in a poisonous cocktail for equities bulls.

MercadoLibre, the $30 billion e-commerce giant based out of Buenos Aires, saw its stock price plunge an excruciating 10%, despite the facts that its shares trade in the US on the Nasdaq and the company has significant operations – and ambitions – outside Argentina.

mercadolibre stock price chart
MELI shares slid as far as $585 following the opening bell. | Source: Yahoo Finance

The “Amazon of Latin America ” posted stellar results  during last week’s earnings presentation, recording a 63% increase in revenue and net income of $16.2 million thanks to significant growth in Mexico and Brazil.

However, the prospect of continuing that growth in a frosty business climate overseen by Alberto Fernandez sent MELI shareholders into a panic.

MercadoLibre stock fell 10.62%; it last traded at $616.81 after bouncing significantly off its session low of $585.73.

But overreaction or not, weathering a Fernandez-run government is a tall order, especially since “Argentina’s Amazon” must contend with rising competition in Latin America from another e-commerce giant: Amazon.