Read this Monday’s edition of the FolhaMercado newsletter (30) – 01/30/2023 – Market

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tycoon in trouble

The group of companies owned by Indian tycoon Gautam Adani lost about $48 billion (22%) in market value since last Wednesday (25), when Hindenburg Research published a report alleging fraud in companies.

The losses continued at the opening of the Indian market this Monday (30).

Understand: Hindenburg announced that it had set up an operation betting on the devaluation of Adani’s companies after conducting a two-year investigation that heard from dozens of people, including former executives of the Adani Group.

• The American company accuses the companies of making inappropriate use of tax havens and having excessive debt, which would put the Indian group’s business in a “precarious financial situation”.

• The report’s headline accuses the Adani Group of “committing the biggest scam in corporate history”.

in numbers: before the release of the report, the companies added $217 billion in market value. They lost $10 billion on Wednesday and, after a holiday on Thursday, lost another $38 billion on Friday.

• The drop was widened after activist investor Bill Ackman – known for betting against Herbalife – said the Hindenburg report was “highly credible and extremely well researched”.

• The fall happens while Adani Enterprises, the group’s main company, tries to raise US$ 2.5 billion in the market in a subsequent share offering (follow-on).

Who is who:

• Hindenburg Research: specializes in investigating corporate fraud to make money by betting against these companies. She is best known for betting against electric truck maker Nikola, whose founder was later convicted of fraud.

Other side: On Sunday, Adani Group released a 413-page response saying it complies with all local laws and has made necessary regulatory disclosures.

• The holding company also said the report is “riddled with a conflict of interest” and seeks to generate gains for Hindenburg shortly before a major move, its follow-on.

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Americanas suppliers take out insurance

In the list of creditors released by Americanas in its judicial recovery process, suppliers appear as one of the largest individual holders of the retailer’s debts after the banks.

• They are part of this list from Samsung (R$ 1.2 billion), through Nestlé (R$ ​​259 million), of chocolates and cookies, Nadir Figueiredo (R$ 52.1 million), of cups and glassware, to Cromus (R$ 7 million), for gift packaging.

Medium and large manufacturers, however, have insurance to protect them from possible defaults by retailers.

In numbers: one of the main companies in the sector, Allianz Trade, estimates that the amount covered by credit insurance with Americanas suppliers will range between BRL 2 billion and BRL 3 billioninvolving Allianz itself and other large companies in the sector.

How it works: suppliers receive a credit limit to be insured based on an assessment made by the insurer of the risk profile of the manufacturers’ customers. Americanas was considered an average retailer by Allianz Trade.

• The companies insured by Allianz have already indicated that they intend to activate the insurance, which involves the payment of a deductible, the amount of which is equivalent to 10% of the total insured, on average. Payment takes place within 30 days.

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Startup of the Week: Neon

On Mondays, the chart shows an x-ray of a startup that recently received funding.

The startup: Founded in 2016, it is a fintech that offers individuals services such as a digital account, credit and debit cards, personal loans, etc. and already has 22 million customers.

In numbers: the startup announced last week to have captured BRL 331 million in financing through a FIDC (credit rights investment funds).

• The instrument allows the company to anticipate the receivables to which it is entitled –in the case of Neon, credit card amounts–in exchange for a fee (understand how these funds work here).

Who invested: it was the second issuance of an FIDC by the startup. The first, from June of last year, captured BRL 400 million and counted on the money of investors close to the startup. In the current one, the company went to the market, in an offer coordinated by XP.

What problem does it solve? Fintech acts as a payment institution, being among the “digital banks” that turned the banking industry upside down by offering financial services without fees.

Why it stands out: in addition to being the largest funding announced by a Latin American startup in the last week, it is an example of how the dynamics of unicorns raising funds in the market has changed in the face of the current scenario of high interest rates.

The week in summary

There were 13 rounds announced in the week, with US$324.3 million (R$1.6 billion) raised by startups in Latin America.

The data was provided by the Sling Hub platform.

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MLS vs Serie A

The “soccer” league has surpassed the country’s top soccer league — at least in business.

In numbers: in 2022, the turnover of the 28 teams that played in the MLS (the US league) totaled $1.6 billion (BRL 8.1 billion) versus $1.1 billion (R$ 5.6 billion) of the 20 clubs in Série A of the Brasileirão.

• The growth of the American league came over the years, while the Serie A lost strength. In 2017, the revenue of the Brazilian championship was US$1.4 billion, while that of the American was US$778 million.

The survey was carried out by the specialized consultancy Sports Value.

Which explains: the clubs’ high investment – ​​just to participate in the league is US$ 325 million (R$ 1.6 billion) – in attracting stars from other countries has helped to attract the attention mainly of the younger ones.

• Americans’ interest in soccer attracts 11% of people under 16 years of age, the same public that chooses basketball and almost double that of those who opt for baseball (6%).

• This is the audience most used to consuming content via streaming, a model that fights on an equal footing with the major TV stations in the US — Apple will pay US$ 250 million (R$ 1.3 billion) per season to broadcast the games from MLS.

In Brazil, clubs try to increase television revenues by organizing themselves into leagues for the sale of Serie A and B rights from 2025, when the current transmission contracts cease to be valid.

• The problem is that there is a divide even in this. About 40 clubs are divided between two leagues, with each block looking for investors to buy championship rights.