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European Parliament approves Markets in Crypto-Assets regulation

Fintech Headlines for April 20, 2023: European Parliament approves Markets in Crypto-Assets regulation, MercadoLibre plans to hire 13,000 people to expand its logistics business, and Shift4 Payments’ founder responds to the short seller report

April 21, 2023

Hi!

Welcome to the fourth issue of the “Popular Fintech” newsletter! Yesterday SpaceX launched its test Starship rocket. It has nothing to do with Fintech, but it was awesome anyways! In the meantime, on Earth:

  • European Parliament approved Markets in Crysto-Assets regulation introducing a harmonized regulation to block’s 27 member states

  • MercadoLibre announced plans to hire 13,000 people to strengthen its logistics business, and

  • Shift4 Payments’ CEO and founded responded to short seller allegations. This was a badass response!

1D change, as of April 20, 2023 close

European Parliament Approves Markets in Crypto-Assets Regulation

The European Union has taken a major step towards regulating the crypto industry as the final vote on the EU's proposed MICA regulations was passed in the European Parliament. The regulations aim to provide a comprehensive framework for the crypto industry, including rules around stablecoins, crypto exchanges, and wallet providers. This move is expected to bring much-needed clarity to the rapidly evolving crypto space and provide a more secure environment for investors. The regulations were met with mixed reactions from industry players, with some applauding the EU's efforts to bring stability to the market, while others voiced concerns over potential stifling of innovation. This development is likely to have a significant impact on the global crypto industry, as the EU represents one of the world's largest markets for cryptocurrencies.

MercadoLibre Plans to Hire 13,000 People to Strengthen Its Logistics Business

MercadoLibre (NASDAQ: MELI), the largest online marketplace in Latin America, has announced that it will be hiring thousands of workers in Mexico and Brazil. The move comes as the e-commerce giant seeks to expand its logistics business and capitalize on the growing demand for online shopping. According to MercadoLibre, the new hires will be primarily focused on improving logistics and customer service, as well as developing new technologies to enhance the user experience. The company plans to invest heavily in these areas in order to meet the needs of its growing customer base, which has been steadily increasing in recent years. In Q4 2022, its latest reported quarter, the company posted an operating income of $349 million on net revenue of $3.0 billion. The company’s revenue from ecommerce operations grew 35.9% YoY, while the company’s Fintech arm, MercadoPago delivered a stunning 92.7% YoY growth.

Shift4 Payments Founder Responds to Short Seller Allegations

Shift4 Payments (NYSE: FOUR) founder and CEO, Jared Isaacman, responded to allegations of short seller Blue Orca Capital. As a reminder, on Wednesday, Blue Orca Capital published a report, accusing the company of inflating its gross profit, EBITDA, and cash flow numbers. In addition, the report floated the idea that the company’s founder and CEO, directed to company to pursue aggressive acquisition strategy to avoid margin call. Isaacman dismissed the allegations of receiving a margin call or selling his shares in 2022, as well as clarified that his share count diminished because of the “donations to St. Jude Children’s Research Hospital”. He also noted that the acquisition strategy of the company is “a fantastic way to improve the customer experience, margins, free cash flow.” Isaacman finished his response with a reminder that Shift4 Payments plans to report its Q1 2023 result on May 4, 2023, and that it might not be a good idea to bet against the company.

Image source: Inspiration4

Chart of the Day

MercadoLibre and Shopify are primarily known for their ecommerce businesses; however, both companies are investing heavily in their payments and logistics operations. Moreover, payment processing has already become a crucial component and a growth driver for both companies. Thus, MercadoLibre processed $123.6 billion and Shopify processed $106.1 billion in payments in 2022 alone.

Data source: MercadoLibre and Shopify

Jobs in Fintech

That’s it for today! Thank you for reading and see you tomorrow!

Jevgenijs

Cover image source: European Parliament

Disclaimer: Information contained in this newsletter is intended for educational and informational purposes only and should not be considered financial advice. You should do your own research or seek professional advice before making any investment decisions.