GetNinjas drops bomb on the Stock Exchange – 09/24/2023 – Marcos de Vasconcellos

Like the ninjas on television shows, GetNinjas (which was intended to be an Uber for service providers) launched a smoke bomb that bewildered investors this week. The company wants to distribute the money it has in cash to its shareholders, in an operation to reduce its capital by around 66%.

It works like this: the company pocketed R$482 million in May 2021, when it made its IPO, the initial offering of shares on the Stock Exchange. Now, to put it simply, he said that he has nothing better to do with R$223 million, which remains in cash, and he will distribute it, paying R$4.40 to whoever holds the share.

It will be similar to a super dividend distribution, but not because the company achieved good results and wants to share this with its investors. It’s because she gave up on her dream of using that money to expand her operations.

NINJ3 shares hit the market selling for R$20 less than two and a half years ago. Whoever believed that it had the potential to become a technology giant and bought the shares in the IPO, suffered one fall after another and today has a share traded at around R$4.60 in their hands.

Adding the share price and the amount that could be paid in this capital reduction, it comes to R$9, which is still less than half the price in the initial offering.

GetNinjas’ justification for proposing this movement, which needs to be approved at a meeting, was to balance its effective financial needs and the ability to generate value for its shareholders, after changes to the business plan. In other words: they believe that their investors are better off putting their money to work elsewhere.

It’s true that the world has changed quickly in recent years, but let’s face it, the ninjas’ IPO was in the middle of 2021. The change in position cannot be blamed on the pandemic, which spread more than a year earlier. The Selic climb also began before the initial offering, in March of that year. It’s not even possible to talk about a general collapse of the market, since the Ibovespa today is around 5% below what it was when GetNinjas arrived on the Stock Exchange.

In the financial market, we went through a major shake-up in “growth” companies, that is, those that depend on accelerated growth to reach the break-even point. Tech giants do this a lot. They spend mountains of gold on marketing, acquiring competitors and companies that have assets that interest them, until they become profitable. When the money taps close earlier than planned, they cannot reach the point imagined.

In this case, however, the path is the opposite. The company has the money, but does not see any chance of achieving significant growth with it, to provide a return to shareholders. In an interview with the Brazil Journal website, the CEO of GetNinjas, Eduardo L’Hotellier, explained: it is better to distribute the money like this than to use it “in a way that does not contribute to all shareholders, as we have seen several cases in the market, with partners using company resources for their own benefit.”

In April last year, his opinion was different. On the podcast “Do Zero ao Topo”, the same L’Hotellier said that buying the company’s shares worth less than it had in cash was “an opportunity for those who believe that our platform will be successful, that we will use the cash to generate business “. They didn’t use it. And they gave up trying.

Waves of financial market debuts, called IPO windows, come and go. With successive interest rate cuts, it is expected that we will have others soon. But trying to surf one of these is always risky.

More than good marketing, you need to understand when and how the business you want to invest in will become sustainable, generating value for your shareholders.

Of course, losses and frustrations are part of the life of those who invest in variable income. It really varies. But it’s important to use these lessons to remember that promises of astronomical returns and magical solutions only serve those who sell pyramid schemes.

Investing in the stock market is becoming a partner in a company. And anyone who associates themselves with something they don’t fully understand is more likely to get scared along the way.

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