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MercadoLibre (MELI) Just Broke $10B, So Why Did Shares Sink?

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MercadoLibre (MELI) Just Broke $10B, So Why Did Shares Sink?


MercadoLibre (NASDAQ:MELI) delivered something it had never done before on August 5: quarterly revenue topped $10 billion. Net revenue and financial income jumped 50% year over year to $10.2 billion, the fastest pace of growth in four years and the 30th straight quarter above 30% growth. Yet the stock fell as much as 8% on August 6 before closing down 5%. When a company experiences rapid top-line growth while its stock declines, the underlying drivers are typically found within its financial details and profit margins.

MercadoLibre (MELI) Just Broke $10B, So Why Did Shares Sink?

Bull Case: A Flywheel That Keeps Spinning Faster

MercadoLibre’s growth is not slowing as it scales; it is accelerating. Gross merchandise volume climbed 36% year over year on an FX-neutral basis to roughly $22 billion, while total payment volume through Mercado Pago crossed $100 billion in a single quarter for the first time, up 56% year-over-year. Advertising revenue jumped 73% year over year in dollar terms, and assets under management on Mercado Pago grew 68% to $23 billion, evidence that users are trusting the platform with more of their financial lives, not just their shopping.

The company’s most telling number might be its smallest sounding one. Ecosystemic users, those active in both the marketplace and Mercado Pago, grew 37% year over year and generated 70% more GMV per user than shoppers who only use the marketplace. That is the flywheel management keeps pointing to, and it helps explain why MercadoLibre is choosing to sacrifice margin now. EPS of $9.19 beat Wall Street’s expectations, a sign the business is not falling apart even as margins compress.

Bear Case: Where All That Growth Is Going

The same quarter that broke revenue records also delivered MercadoLibre’s weakest profitability in years. Operating income fell from $825 million a year ago to $683 million, and operating margin narrowed from 12.2% to just 6.7%, the lowest in four years. Net income of $466 million carried a margin of 4.6%, which one Fool contributor called the worst net margin performance since late 2023. Two forces are driving that squeeze. MercadoLibre keeps a lowered free shipping threshold in Brazil in place to fend off foreign rivals offering cutthroat promotions, and it is issuing credit cards at a rapid clip, with 2.6 million issued in the quarter versus 1.6 million a year earlier.

That credit expansion carries real risk. The credit portfolio grew 75% year-over-year to more than $16 billion, and faster loan growth typically means more loans eventually go bad, pressuring near-term loss provisions. First-half 2026 revenue of $19 billion rose 50%, but first-half net income of $883 million actually fell 13% from a year earlier. The stock is down more than 20% over the past year, with one contributor pegging the drop closer to 29%.

What The Positioning Data Shows

Hedge fund ownership slipped from 113 funds to 102 funds, a modest pullback rather than a stampede out. Short interest sits at just 1.91% of float, showing little organized betting against the stock even after its decline. MercadoLibre trades at 35.34 times forward earnings, a multiple that still assumes real growth ahead despite the compressed margins. That combination, funds trimming lightly while short sellers stay largely on the sidelines, suggests skepticism here is measured rather than acute.

The Question Investors Still Have To Answer

MercadoLibre’s growth engine is not in doubt. What is in doubt is when, or whether, that growth starts converting into expanding profit again. For the bull case to play out, the ecosystem’s deepening engagement needs to eventually let MercadoLibre ease off free shipping and promotional spending in Brazil without losing share.

While we acknowledge the potential of MELI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In.

Disclosure: None. Follow Insider Monkey on Google News.



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Stop Solving the Wrong Problem — First Ask This Question When Growth Stalls

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Stop Solving the Wrong Problem — First Ask This Question When Growth Stalls


Opinions expressed by Entrepreneur contributors are their own.

Key Takeaways

  • Early validation is not permanent validation — a product that solved a clear need six months ago can quietly drift from the problem it was built to address.
  • What customers say and what they do are rarely the same — trust the behavior over the feedback, because purchasing patterns and drop-offs are more honest signals than anything in a survey.

Founders are often taught to move quickly, listen to feedback and keep improving. That advice is useful, but it can also create a trap. When a product or business model starts to struggle, many entrepreneurs immediately look for ways to refine the solution. They add a feature. They adjust the messaging. They change the packaging, pricing or sales process.

Sometimes that works. Other times it only makes the business more complicated. I have learned that one of the most important questions a founder can ask is not “How do we make this better?” It is “Are we still solving the right problem?”

That question matters because markets do not stand still. Economic pressure changes buying behavior. What felt urgent to customers at one stage of the business may feel less relevant six months later. A product that once solved a clear need can slowly drift away from the problem it was created to address.

This is especially important for founders building in health, wellness, consumer products or any category where trust, behavior and daily routines matter. Customers may not always be able to explain what they need in a survey or review. But they will show it through what they buy, repeat, abandon and recommend.

Research from McKinsey has found that organizations that leverage customer behavioral insights outperform their peers by 85% in sales growth and more than 25% in gross margin. For founders, the takeaway is simple: strategy should not be built only around what customers say. It should also be built around what they do.

Reassess the problem before refining the solution

Founders can become attached to their original idea because they remember the energy that gave rise to it. They remember the pain point, the early conversations and the first signs of traction. But early validation is not permanent validation.

The more a company grows, the more dangerous assumptions become. A founder may think the problem is still convenience, when the customer now cares more about trust. They may think the challenge is price, when the real barrier is confusion. They may think the market wants more options, when customers are actually asking for a clearer path.

Before refining a product, founders should pause and define the current problem as clearly as possible. What is the customer trying to solve today? What has changed in the market? What pressure is the customer feeling now that they were not feeling before?

In my own work across consumer and wellness brands, this reassessment has been essential. A product may begin with one promise, but the customer’s relationship with that product can reveal something deeper. They may not only want a supplement, a skincare product or a wellness solution. They may want simplicity, confidence, consistency or a better way to make daily choices that support their lives.

When my team understands that deeper problem, improvement becomes more focused. The goal is no longer to add more. It is to solve more precisely.

Let behavior lead your strategy

Customer feedback matters, but it is not the whole story. Customers can tell you what they think they want. Their behavior tells you what they truly value.

That is why founders should pay close attention to purchasing patterns, repeat usage, drop-off points, engagement signals and the moments when customers hesitate. These signals reveal where your business is aligned and where it is creating friction.

If customers consistently purchase one product but ignore a bundle, the issue may not be awareness — the bundle may be too confusing. If customers engage heavily with educational content but hesitate to buy, the product may need clearer proof or simpler positioning. If customers buy once but do not return, the problem may be experience, expectation or follow-through.

I have learned to separate preference from behavior. A customer may say they want more choices, but too many choices can create decision fatigue. A customer may say they want innovation, but what they actually reward is reliability. A customer may praise a brand’s mission, but only buy when the offer feels clear and useful.

Real-world action is one of the most honest forms of feedback. The founder’s job is to notice it without defensiveness.

Simplify before you scale

When growth slows, many companies respond by adding. They add more products, more features, more campaigns and more explanations. The intention is usually good. The result is often confusion.

Complexity can make a business feel more sophisticated internally while making it harder for customers to understand externally. In their influential Harvard Business Review study on “feature fatigue,” Roland Rust and colleagues found that consumers routinely pick feature-rich products at the moment of purchase, then abandon them once they discover the complexity gets in the way of actually using them. The lesson for founders is unambiguous: more is not the same as better.

Founders should ask hard questions before scaling. Is the offer clear enough to grow? Can people quickly understand what the product does? Can they see who it is for? Can they explain the value in their own words? Can they buy, use and recommend it without needing excessive explanation? Answering those questions requires looking at the entire customer journey.

Simplicity does not mean reducing ambition. It means removing anything that distracts from the core value. In many cases, scaling becomes easier when the offer is narrower, the message is cleaner and the experience is more intuitive.

Build reassessment into the business

Product-market fit is not a finish line. It is a relationship between the company, the customer and the market — and like any relationship, it requires continued attention.

Founders should create systems that make reassessment part of the business rhythm. That may include regular reviews of customer behavior, cross-functional conversations between product and marketing teams, post-purchase analysis, customer service insights and market trend reviews.

The key is not to collect more data for its own sake. The key is to turn feedback into decisions. What should be simplified? What should be removed? What should be tested? What needs to be explained differently? What assumption is no longer true?

This process also requires humility. Founders must be willing to admit that a product can be good and still need to change. A strategy can be smart and still need to evolve. A market can validate an idea once and still demand something different later.

The founders who build lasting companies are not only the ones who move fast. They are the ones who stay close enough to the customer to know when to pause, reassess and redirect.

Growth is not always about building the next version of the solution. Sometimes it is about returning to the problem with fresh eyes. When founders make that a habit, they give their companies a better chance to stay relevant, useful and resilient as the market changes.

Key Takeaways

  • Early validation is not permanent validation — a product that solved a clear need six months ago can quietly drift from the problem it was built to address.
  • What customers say and what they do are rarely the same — trust the behavior over the feedback, because purchasing patterns and drop-offs are more honest signals than anything in a survey.

Founders are often taught to move quickly, listen to feedback and keep improving. That advice is useful, but it can also create a trap. When a product or business model starts to struggle, many entrepreneurs immediately look for ways to refine the solution. They add a feature. They adjust the messaging. They change the packaging, pricing or sales process.

Sometimes that works. Other times it only makes the business more complicated. I have learned that one of the most important questions a founder can ask is not “How do we make this better?” It is “Are we still solving the right problem?”

That question matters because markets do not stand still. Economic pressure changes buying behavior. What felt urgent to customers at one stage of the business may feel less relevant six months later. A product that once solved a clear need can slowly drift away from the problem it was created to address.



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Live updates: Bitcoin at $63,600 as Japan’s Metaplanet moves 3,881 BTC between wallets

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Live updates: Bitcoin at $63,600 as rare US-Japan yen action tests carry-trade fears

Metaplanet shifted 3,881 BTC, worth about $247 million, across several transactions over three hours on Wednesday, per Arkham data.

The move went from the company’s cold wallets to new addresses it also controls, not to an exchange.

Transfers to fresh self-custody wallets don’t add to tradable supply the way deposits to an exchange do, so on their own they aren’t selling.

Metaplanet has done this before. It moved nearly 5,000 BTC in March in the same pattern, test transactions followed by larger amounts into new wallets, and analysts then read it as internal custody reshuffling rather than distribution. Nothing in Wednesday’s on-chain data points anywhere different.

Metaplanet bought its roughly 43,000 BTC at an average of about $96,000, so with bitcoin near $63,600 the company is sitting on an unrealized loss of about $1.4 billion, down 34%.

Metaplanet has been one of the most aggressive corporate buyers since April 2024, with a stated target of 210,000 BTC.



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CareDx Stock Is Up 300% Over the Past Year. Here’s How Much Upside Is Left.

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How Is Fortinet's Stock Performance Compared to Other Cybersecurity Stocks?


3d illustration inflation and deflation graph by Deepadesigns via Shutterstock
  • CareDx (CDNA) has surged 300% over the past year, driven by robust technical momentum and strong buy signals.

  • CDNA is rated a “Strong Buy” by several analysts, with consensus price targets suggesting up to 12% further upside.

  • Revenue is projected to grow 30.38% this year, with earnings expected to rise 109.19%, supporting the bullish outlook.

  • Technical indicators remain bullish, but high volatility and a trailing price-earnings ratio highlight speculative risk.

Today’s Featured Stock

Valued at $2.42 billion, CareDx (CDNA) is a commercial stage company. It develops, markets, and delivers a diagnostic surveillance solution for heart transplant recipients. 

What I’m Watching

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals and superior current momentum. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. CDNA checks those boxes. The Trend Seeker issued a new “Buy” signal on April 17. Since then, the stock has gained 122.39%.

www.barchart.com

Barchart’s Technical Indicators for CareDx

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

CareDx scored a 3-year high of $49.76 on Aug. 3.

  • CareDx has a Weighted Alpha of 229.37.

  • CDNA has a 100% “Buy” opinion from Barchart.

  • The stock has gained 298.83% over the past 52 weeks.

  • CareDx has its Trend Seeker “Buy” signal intact.

  • The stock recently traded at $47.05 with a 50-day moving average of $31.30.

  • CDNA has made 7 new highs and gained 65.54% over the past month.

  • 60-month beta of 2.39.

  • Relative Strength Index (RSI) is at 73.62.

  • There’s a technical support level around $45.26.

Don’t Forget the Fundamentals

  • $2.42 billion market capitalization.

  • 263.59x trailing price/earnings ratio

  • Revenue is predicted to grow 30.38% this year and another 5.82% next year.

  • Earnings are estimated to increase by 109.19% this year and an additional 11.68% next year.

Analyst and Investor Sentiment on CareDx

  • The Wall Street analysts followed by Barchart give the stock 5 “Strong Buy” and 3 “Hold” opinions with price targets between $40 and $64.

  • Value Line rates the stock “Average.”

  • CFRA’s MarketScope rates the stock a “Strong Buy.”

  • Morningstar thinks the stock is 12% overvalued with a fair value of $41.66.

  • 7,190 investors are following the stock on Seeking Alpha, which rates it a “Strong Buy.” They also rate it the No. 1 Biotech stock.

  • Short interest is 11.96% of the float with 7.76 days to cover the float.

The Bottom Line on CareDx

CareDx has enjoyed extremely upward price appreciation. Analysts’ consensus is that although the stock is still rated a buy, it has about 12% room to still appreciate.

Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.

On the date of publication, Jim Van Meerten did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com



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Dogecoin and BNB lead majors higher as bitcoin slips near $63,700

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Dogecoin and BNB lead majors higher as bitcoin slips near $63,700

CoreWeave surged 16% after hours on stronger-than-expected sales growth, and Super Micro Computer rose almost 8% on a revenue forecast above estimates, lifting Nasdaq 100 futures.

Oil kept climbing. Brent rose over 1% to $90 a barrel, a sixth straight session of gains and its longest run since April, with traders still doubtful about a Middle East deal.

Jeff Mei, chief operating officer at BTSE, said the week’s direction rests on the inflation print and on whether Iran and the U.S. reach a deal over the Strait of Hormuz.

“Last week’s US job numbers were weak — a continuing narrative supporting this trend and lower inflation would cement expectations for Fed cuts by year-end, boosting liquidity and risk assets like Bitcoin,” Mei said.

“Traders should watch for any hawkish pushback from Fed speakers, but the macro setup could lead to a relief rally if this week’s CPI numbers are lower than expected,” he added.

July inflation data is due at 8:30 a.m. ET, with oil’s run feeding directly into it.



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Behind the Ticker: BDGS Contrarian Investing for Retirees

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Behind the Ticker: BDGS Contrarian Investing for Retirees


Raymond Bridges and Brad Roth smile while talking on Behind the Ticker

Raymond Bridges didn’t set out to build just another ETF, instead creating one for people who can’t afford market drama. He digs into the reasoning behind the launch of the Bridges Capital Tactical ETF (BDGS), the mechanisms that have led to an up to 80% position in cash by the fund, and where it fits into portfolios on this episode of Behind the Ticker with host Brad Roth. 

As a CPA based in Florida, Bridges spent 26 years watching a very specific kind of investor: retirees pulling money out every month, not younger folks piling it in. That distinction is everything to him, because volatility that helps an accumulator wrecks a distributor. After years at Wells Fargo, he launched Bridges Capital in 2018 and rolled out BDGS, the Bridges Capital Tactical ETF, in 2023 to put that philosophy into practice.

The fund itself is a mixture of big-picture macro thinking and disciplined technical trading. On the macro side, Bridges leans on Austrian business cycle theory, arguing that COVID-era money printing is still distorting asset prices and that we’re in the late innings of that cycle. It’s the reason the fund has held as much as 80% cash and never gone above 60% equities since launch. On the tactical side, the team tracks market breadth across four indexes and buys into weakness in small tranches, hunting for top-market-cap names trading below their averages rather than chasing momentum. It’s a deliberately counter-trend approach, with the fund holding cash through June’s strength and only starting to scale in as breadth firmed up under softening prices.

Bridges also offered insights on how the fund should be judged and where it fits. He pushes the Sortino ratio over the more common Sharpe ratio, since Sortino only penalizes downside risk, the metric retirees actually care about. He’s not shy about pitching BDGS as a replacement for the bond sleeve in a 60/40 portfolio either, arguing long bonds are illiquid and structurally weak at today’s yields. And zooming out, he sees the falling cost of launching an ETF as a genuine industry shift, opening the door for smaller firms with real, tested processes to compete with giants like Vanguard and BlackRock.

To learn more about the Bridges Capital ETF, go here.


Disclaimer: The market insights, projections, and investment strategies expressed in this article are solely those of the contributor and do not necessarily reflect the views or opinions of ETF.com. This content is provided for informational purposes only and does not constitute financial, investment, or legal advice.

Permalink | © Copyright 2026 etf.com. All rights reserved



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Velvet gains 25% as staking loses $160K – Rally holds IF…

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Velvet gains 25% as staking loses $160K - Rally holds IF…


Velvet [VELVET] surged 25%, extending its 90-day gain to 548%.

Retail traders appeared to drive much of the move. The whale-retail delta remained negative, indicating retail activity stayed dominant.

However, a slight uptick suggested whales may have contributed to the rally. The key question is whether VELVET’s momentum can withstand rising downside risk.

Could VELVET fall after its rally?

The Liquidation Heatmap showed a strong concentration of liquidity below VELVET.

Liquidation clusters mark levels where leveraged positions could be forced to close. These areas may attract price, but do not guarantee a move.

The one-month chart showed a few clusters above VELVET’s price. That left limited nearby upside liquidity.

By contrast, a large downside cluster formed between $0.19 and $0.14. The area carried deeper unfilled liquidity. This kept the zone in focus despite VELVET’s rally. A reversal could expose those lower levels.

The chart showed liquidation concentrations of $15,960 for longs and $53,870 for shorts.

Both readings suggested limited nearby leverage buildup. Even so, VELVET could still face a pullback after its sharp rally.

Velvet liquidation heatmap.
Source: CoinGlass

Are VELVET stakers taking profits?

Staking activity also weakened as users pulled capital from VELVET’s protocol over the past day.

VELVET staking supports governance participation and offers yield to token holders. However, lower staking may suggest that some holders stopped pursuing yield after recent gains.

Staking volume of VELVETStaking volume of VELVET
Source: DeFillama

Over the past day, staked VELVET fell by $160,000 to roughly $1.5 million.

Since July 14th, the total has declined from $2.26 million. That represented a drop of nearly $760,000. The decline did not confirm direct token sales. However, holders can unstake tokens before selling, keeping profit-taking risk in focus.


Final Summary

  • VELVET price rose 25% and extended its 90-day gains to 548%.
  • Total staked value dropped to about $1.5 million, suggesting some holders may have reduced their yield positions.

 



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