DLocal Ltd. DLO
Muddy Waters is short DLO: contradictory TPV disclosures, implausibly high FX-driven take rates, governance failures and ~$1bn of insider selling point to likely fraud at the Uruguay-based payments processor.
Thesis
Muddy Waters is short DLocal (NASDAQ: DLO), the Uruguay-based cross-border payments processor spun out of AstroPay, arguing the company is likely a fraud. DLO's filings contain materially contradictory TPV and receivables disclosures — the 2019 New Merchant cohort was reported as both $471 million and $56 million — which Muddy Waters frames as classic cooked-books evidence. DLO's take rate is multiples of peers like Ebanx, Adyen, and PagSeguro, with roughly half driven by FX gains that should be closer to 150bps than the ~290bps booked. Governance is riddled with red flags: a fintech running on Excel, repeated Malta Tier 1 capital breaches, questionable auditors, AstroPay entanglements, and a $38.7mm PrimeiroPay 'prepayment' that enabled insider option exercises. Management and directors dumped ~$1 billion in stock within five months of the IPO, and five senior executives have resigned since June 2022.
SCQA
DLocal is a fast-growing Uruguay-based cross-border payment processor spun out of AstroPay, serving merchants like Google in Latin America and emerging markets at a reported take rate that makes it a peer-group outlier.
Public filings contradict themselves on TPV and receivables, the take rate is 2-3x peers with implausible FX gains, governance is thin (Excel-run ops, Malta capital breaches, AstroPay entanglements), and insiders have dumped ~$1 billion.
Short DLO; the accounting contradictions, outlier unit economics, and insider flight indicate likely fraud and materially overstated revenues rather than a legitimate outlier business.
Muddy Waters does not publish an explicit price target but frames DLO's $6.3bn market cap at $21.22 as built on overstated revenues, implying material downside as the fraud narrative emerges.
The three reasons
- 1
Contradictory TPV and receivables disclosures suggest cooked books
- 2
Take rate is 2-3x peers with implausibly large FX gains
- 3
Governance red flags and ~$1bn of insider selling post-IPO
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Notable slides (6)
Notes
Memo-style short report (Word-document formatting, blue section headers, tables and embedded screenshots — no slides). Opens with a Theranos allusion ('no pictures of its CEO wearing black turtlenecks'). Title borrows a Twain-attributed quote: 'History Never Repeats Itself, but it Does Often Rhyme.' Classic Muddy Waters fraud-pattern stack: accounting contradictions + take-rate outlier + governance red flags + insider selling + exec exodus. Carson Block credited as Director of Research on the cover. No explicit price target, consistent with MW's usual practice.