Why StoneCo Stock Crashed Today
Key Points
CNBC reports that Lula beat Bolsonaro 51.8% to Bolsonaro’s 48.2% in Brazil's 2026 presidential election.
Investors had bet Bolosonaro would win, and are upset by the result.
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What goes up must come down -- and boy, oh, boy is StoneCo (NASDAQ:STNE) stock ever coming down fast today!
Shares of the Brazilian e-commerce software companytook off like a rocket earlier this month after conservative candidate Flávio Bolsonaro outpolled incumbent President Luiz Inácio Lula da Silva 47.3% to 44.8% in the first round of voting in Brazil's presidential election. But the more important run-off election wrapped up last night, and Lula pulled off an upset, winning 51.8% of votes cast to Bolsonaro's 48.2%.
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Investors are furious, and they're taking out their ire on every Brazil-related stock they can find. StoneCo stock is down 30.5% as of 10:15 a.m. ET.
Image source: Getty Images.
Election Brazil 2026
This news gets worse -- because the election may not even be over. Bolsonaro is refusing to concede defeat and is challenging the election results, alleging abuse of power to suppress voting in key Bolsonaro-leaning districts. While this raises the slight chance that conservatives may still win, the opposite result still seems likely, and various South American heads of state have already made their calls to congratulate the incumbent on his victory.
What does any of this have to do with StoneCo?
Although incorporated in the Cayman Islands, StoneCo is a Brazilian company. Investors had hoped a change in administration might help shore up Brazilian finances, lower debt and tax costs, and generally improve the business climate. That could still happen under a Lula administration -- which will now last into 2030 -- but investors don't seem optimistic.
Keep fingers crossed, though. It wouldn't take much improvement -- by anyone -- to turn this stock into a buy. StoneCo stock costs a cheap 4.2 times earnings, and Wall Street analysts expect it to grow earnings more than 16% annually over the next five years.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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