Nu Holdings Ltd. (NYSE: NU) shares slipped 3.1% to $11.60 in Monday afternoon trading, erasing gains from last week's buyback announcement as investors weighed management changes and rising credit costs. The drop came despite a broader market uptick, with the SPDR S&P 500 ETF rising about 0.5%.
The parent company of Brazilian digital bank Nubank unveiled a $1 billion share repurchase program on June 4, running for 12 months, in an effort to signal confidence in its capital position. The buyback initially boosted shares by 4.1% last Thursday, but the rally quickly faded. For the week, NU fell 10.7%, and the stock is now down 30.7% year-to-date, hovering just above its 52-week low of $11.20.
BofA Securities analyst Mario Pierry downgraded Nu to Underperform from Neutral and slashed his price target to $10 from $16, citing uncertainty following the departure of CFO Guilherme Lago. Lago, described by Pierry as one of Nu's top executives, is transitioning to an advisory role and will be replaced by Rob Livingston, former CFO of Visa North America, effective July 13. Pierry highlighted that the timing of the change adds risk, especially given Brazil's tightening credit environment and Nu's expansion efforts in Mexico, Colombia, and the United States.
Nu's first-quarter results, reported in May, showed strong revenue growth but also revealed rising credit costs. The company surpassed 135 million customers and reported a record $5 billion in revenue. Net income reached $871 million, with a return on equity of 29%. However, credit loss allowances surged 33% quarter-over-quarter to $1.79 billion, and the 15-to-90-day overdue-loan ratio stood at 5.0%.
Chief Executive David Vélez said the company's strategic priorities—growth in core markets, building around artificial intelligence, and disciplined international expansion—remain unchanged. The company also announced the appointment of John Walton as chief information security officer, a role aimed at bolstering security as Nubank scales its operations for over 135 million customers.
Market reaction suggests Nu is trading on its own story rather than following broader Latin American fintech trends. Peer MercadoLibre gained 0.6%, StoneCo rose 1.1%, while Inter & Co fell 1.6%, indicating that Nu's buyback support, leadership risk, and credit questions are driving its price action independently.
Investors are now questioning whether the $1 billion buyback is sufficient to counter dilution and support the stock amid rising credit losses and the CFO transition. Nu's expansion into new markets like Mexico, Colombia, and the U.S. requires significant spending, and success at scale remains unproven. Traders will be watching whether the stock can hold above last week's low and for any updates on buyback execution or commentary on the CFO change ahead of the next earnings report.
