MercoPress. South Atlantic News Agency

Shares of Uruguayan unicorn plummet after rumors of fraud

Uruguay's first-ever unicorn pledged to rebut the allegations in due course

Shares of the first and only Uruguayan unicorn dLocal, a company that debuted on Wall Street in June 2021 fell up to 43% this from $21 to $10 a piece Wednesday after rumors of fraud went public.

The US-based hedge fund Muddy Waters Capital denounced “possible fraud” and sold dLocal stock through an operation that allowed them to obtain profits even if the share value dropped. The fund added that the Uruguayan company has had repeated failures in its third-party verification and that its collection accounts flatly contradict each other. According to Bloomberg, Muddy Waters Capital is under investigation in a broader market manipulation probe.

In a statement to investors, dLocal denied the hedge fund's claims. “Reports of short selling are often designed to drive down the share price to serve the interests of short sellers to the detriment of the company and its shareholders,” the company said.

Uruguay's first-ever unicorn (an emerging technology-based company) which was once reported to be worth over US$ 1 billion, pledged to rebut the allegations in due course. The company is specialized in electronic payment services. It has operating branches in Malaysia, the Philippines, and Vietnam, in addition to Latin America, the Middle East, and Africa. Its customers are primarily US or European companies that want to offer their services in Latin America or Asia. Some of its clients include Wix, Avast, GoDaddy, Uber, and Sony, according to 2021 reports.