On November 1, 2021 – Nu Holdings (NuBank), the Brazilian neobank (similar to Revolut) backed by Warren Buffett, is seeking a valuation of $50B in its IPO (Initial Public Offering), making it one of Latin America’s biggest companies.

The digital bank in your phone is a service that is really new to this region. The entire Latin American financial services market is valued at $1 trillion by the World Bank, Nu Holdings wrote in its prospectus. But financial services in Latin America in general are expensive and available only to a limited number of people, bureaucracy is everywhere, and the percentage of those who have cell phones is high. Almost an ideal environment for start-ups looking to win over traditional companies.

  • Detailed instructions how to participate in Nu (pre-IPO, offering price) see belowπŸ‘‡
Nu IPO
Nu IPO

What is an IPO and how it works

IPO is a process of offering shares of a private corporation to the public in a new stock issuance. Why go public? The primary benefit of going public is easier access to capital.

To go public, a company must have a track record of growth and other favorable results and hire an investment bank (Morgan Stanley/ Goldman Sachs/ Citigroup/ Nu Invest/Allen & Co./ HSBC/ UBS Investment Bank in Nubank's case) to come in and underwrite the IPO. The underwriters also performed due diligence and verified financial information and business model.

Once the paperwork done, the company sells the stock to institutional investors. When the initial block of shares has been sold, the company with underwriters' help sets an initial price and date for the stock to begin trading on a stock exchange.

Company Profile and Financial Indicators before Nu IPO

The Brazilian entity is primarily known for its bank NuBank, which is one of the largest neo-banks in the world that focuses on online services without physical locations.

The company's potential post-IPO valuation could be $50 bn, with a current valuation of $30bn, making NuBank the most expensive digital bank in the world. Its closest competitor, the Swedish fintech startup Klarna was valued at $45.6bn in June 2021.

The company is one of the main innovators in the banking sector in Brazil. While many financial market players charge fees even for basic transactions, Nubank offers free services. The company started in 2013 by issuing credit cards with no fees, before gradually moving on to provide insurance, issue loans and offer savings accounts.

One of the bank's big investors is Berkshire Hathaway, which invested $500m in it this year. The bank now has more than 48m users, including the Brazilian pop star Anitta, and has branches in other Latin American countries. On average, the company grows its customer base by 2 million new customers each month.

The organisation's growth prospects are high. More than 650 million people live in Latin America, many of whom are still unbanked. The potential market is estimated at $269 billion. A positive factor for development is legislation that is loyal to the fintech sector.

Now Nubank gets more than half of its income from interest on credit cards and retail loans, plus it invests its own funds - mainly in government bonds. The second largest source of income is commissions, which the bank receives when customers pay with its cards (they are paid by merchants). Another source of income - subscriptions to loyalty programs, commissions for late payments, and money from brokers and management companies, which the company receives when it sells their services to customers.

The bank now operates in Brazil, Mexico and Colombia, which account for 60% of the population of all Latin America.

Nubank Competitors

Nubank's top competitors include Monese, N26, Atom Bank and Monzo Bank.

Nubank IPO News and Updates

How to Buy Nu Stocks Before the IPO (Offering Price)

In the past, IPOs as highly profitable investments were available only to the privileged customers of the leading brokerage firms and it was challenging for retail investors to gain access. You couldn't buy shares paying the price set by the company and you had to wait until the shares actually start trading on the public stock market at whatever stock price supply and demand allows.

Technologies and marketplaces changed the rules of the game, now regular investors can get pre-IPO shares. To participate in Nu IPO you need to use an IPO investing app like Freedom Finance (NASDAQ: FRHC), TD Ameritrade or Fidelity. They give its customers access to IPOs and secondary offerings through their existing brokerage account. Also you can buy Nu shares when the company goes public via a trading app like eToro.

stocks list

🚨 Detailed Instructions How to Participate in the Nu IPO before public trading:

Below we share the instruction how to participate in the approaching Nu IPO using Freedom Finance (Freedom24 platform). Β This marketplace is chosen as an example because Nu is already listed there.

🎁 A special offer is available for this IPO.

*** Freedom Finance services are NOT available to US citizens and residents.

  1. Apply for a Freedom Finance account β€” you need to prepare your identity document and a document confirming the address of residence (utility bill). The verification process is very fast, it will take 2 minutes to create your account.
  2. Deposit your account β€” to participate in an IPO, your account must have available funds in the amount you send IPO application for.
  3. πŸ’‘ Tip: It's recommended to deposit your account in advance. Often the exact IPO date is undefined until the last day. You may have a short notice for participation and account deposits also takes time for processing. Also, sometimes Freedom sends last-minute IPO offer when you have 2 hours to participate.
  4. Submit a request to participate in the IPO β€” when applications are open select Nu and click Participate in the IPO > input the amount you want to invest > Send your application. Note: Before the book closing, a request can be withdrawn. At the time of the book closing, 1 day before the start of the exchange trading, the specified amount will be blocked on the account.
  5. Wait for allocation β€” The actual number of stocks purchased during an IPO depends on supply and demand. The higher underwriter reserves the right to partial execution of collective applications. So if the demand is high you may get less than you applied for. Of course, you will only pay for the shares purchased. The rest of the funds will be returned to your account.
  6. Start of trading β€” With the beginning of the public trading on the stock exchange, the purchased shares will appear on the account and a lock-up period will start β€” a 93-day period of prohibition on sale. You can’t sell stocks, but you can track their current value and growth indicators in your personal member area and a trading terminal.
  7. Closing your trade β€” At the end of the 93 days lock-up period, you will be able to manage your stocks at your discretion β€” leave in the portfolio or sell and withdraw money or transfer the stocks to another depository/ broker in your name. This can be done in your account by clicking the β€˜Sell’ button next to the name of the security. In this case, a commission of 0.5% of the amount of the sale transaction is charged.
Participate in Nu IPO now

Is investing in IPOs profitable?

Not always. The average return at the end of the lock-up period is 72%, past IPOs data.

When is the Nu IPO date?

Estimated Nu's IPO date is December 12, 2021.

What is Nu IPO price range?

Nu Β IPO price range is $10.00 - $11.00 per share.

How to Invest in Nu after the IPO date (opening price)?

After the IPO you can buy Nu stocks via Freedom24. Or if you're from the US use a trading app like eToro on the first trading day.

In what currency Nu IPO and post-IPO shares will be traded?

The Nu IPO and stock trading currency will be USD.

If you have funds in another currency the cheapest way to convert your currency is to use the mid-market rate (that’s the one you’ll find on Google) which can be done via a fintech service like Wise. Banks may add hidden markups to their exchange rates - charging you more without your knowledge. And if they have a fee, they charge you twice. Wise never hides fees in the exchange rate.

What is the Nu (stock symbol)

The stock ticker for Nu will be NU

Nu Prospectus

Nu Registration Statement on Form S-1

IPO Calendar 2021
IPOs this week and upcoming 2021

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