Nu Holdings Ltd. (NYSE: NU) ended the week with an 8.8% decline, as a newly announced $1 billion share repurchase plan failed to offset investor concerns over a change in chief financial officer and mounting credit risks. The Brazilian digital bank's American depositary shares closed Friday at $11.97, down 1.24% on the day and from $13.13 a week earlier, according to historical price data.
The sell-off comes despite the company's board approving a buyback of up to $1 billion in Class A ordinary shares over the next 12 months, through June 3, 2027. The program, announced on June 4, allows Nu to repurchase shares in open market or private transactions and can be paused at any time. Funding will come from retained or future earnings. However, with U.S. markets closed for the weekend, Monday, June 8, will provide the first full trading session for investors to react to the buyback—whether they view it as a sign of management confidence or merely a capital-allocation move after a turbulent week.
The broader market also weighed on Nu's stock. On Friday, the S&P 500 lost 2.64% and the Nasdaq Composite dropped 4.18%, as a stronger-than-expected U.S. jobs report reignited fears that the Federal Reserve may delay easing monetary policy. Growth stocks were hit hardest, as higher interest rates reduce the present value of future earnings, a dynamic that particularly affects high-growth fintech names like Nu.
The company's share slide began after the June 1 announcement that Rob Livingston would succeed Guilherme Lago as CFO, effective July 13. Lago, a key voice on Nu's financial strategy, will stay on as a special adviser through August 31 to ensure a smooth transition. Livingston previously served as Visa's CFO for North America. The change introduces uncertainty at a time when Nu faces tightening credit conditions in its core Brazilian market and as it expands into Mexico, Colombia, and the United States.
BofA Securities responded by downgrading Nu to Underperform from Neutral, slashing its price target to $10 from $16. The analyst cited reduced visibility following the CFO shift and heightened credit risk, meaning the potential for borrowers to default. As Nu scales in new geographies and faces potentially higher loan losses or capital demands, the buyback may fail to reassure investors, BofA warned.
Nu's fundamentals remain strong in absolute terms. In its first-quarter earnings released in May, the company reported surpassing 135 million customers and crossing $5 billion in revenue for the first time. Net income reached $871 million, and return on equity hit 29%. CEO and founder David Vélez highlighted the company's focus on artificial intelligence, describing Nu as "rebuilding banking around AI," and called Mexico's market an "inflection point."
However, competition in Brazil is intensifying. Nu now goes head-to-head with established giants such as Itaú Unibanco, Bradesco, and Santander Brasil, which leverage their larger balance sheets and pricing power to challenge Nu's low-fee model. Investor attention is shifting from customer acquisition to profitability per customer as credit conditions tighten.
Looking ahead, Nu's recovery hinges on whether the market can look past the CFO transition and refocus on customer growth, Mexico's path to breakeven, and the effectiveness of the buyback. If risk appetite remains subdued or credit conditions in Brazil worsen, the $1 billion repurchase plan could be perceived as a defensive move rather than an opportunistic use of capital.
