mercadolibre.com... perchè nessuno ne parla?
If you want a recipe for growth, take a proven dot-com model like eBay (Nasdaq: EBAY) and sprinkle it over a growing Internet market like Latin America. That's what MercadoLibre (Nasdaq: MELI) has been doing since 1999, but it wasn't until Friday that investors got a chance to buy into the company's hot IPO. Friday's rocky trading wasn't going to rain on MercadoLibre's parade. Spanish for Free Market, MercadoLibre priced its Wall Street debut at $18 a share. The stock opened at $22 before barreling toward a $28.50 close. The company is profitable, growing quickly, and is nearly everything that you would want in an aggressive growth company. But before you dive in quicker than you can say "si," let's take a look at the good, the bad, and the bubbly. If you're a fan of eBay but find yourself souring on the marketplace's slow growth lately, MercadoLibre is a potent elixir. Revenues have more than quadrupled since 2004 to $52.1 million last year.
The company turned profitable last year and has been pumping up its operating margins ever since. Last year's operating margins of 10.4% may not seem all that inspiring. It's less than half of the 23.8% operating margins sported by eBay in 2006. But keep in mind that MercadoLibre is still early in its growth cycle. If you want to stack this up against eBay, you have to go back to 1998 when eBay generated $86.1 million in revenues on operating margins of 14.9%. Oh, and margins at MercadoLibre improved to a healthier 17.7% in this year's first quarter. Like eBay, MercadoLibre has its own online payment platform. And also like eBay's own PayPal, Mercado Pago is growing quicker than the company's marketplace revenues. Auction listing fees, final value fees, and optional features now account for 85% of total revenue at the company. MercadoLibre made its debut in Argentina eight years ago this month, but it now has a presence in 12 different Latin American countries. Given its sheer size, it's not a surprise to see that Brazil accounts for 59% of the company's business. With some countries in the area commanding Internet penetration rates at half of the Stateside adoption rate of roughly 70%, it's easy to fathom the upside of being a leader in regions that will only continue to get more connected in the coming years. MercadoLibre served as the middleman to more than $1 billion in gross merchandise value transactions last year, and that figure excludes big ticket items like cars and real estate. In 2006, the company watched over 1.7 million unique sellers, 4.4 million buyers, and produced 13.8 million successful auctions. That may not seem like much compared to the $52.5 billion in gross merchandise value that eBay facilitated last year, but things are just starting to heat up at MercadoLibre.
If you want a recipe for growth, take a proven dot-com model like eBay (Nasdaq: EBAY) and sprinkle it over a growing Internet market like Latin America. That's what MercadoLibre (Nasdaq: MELI) has been doing since 1999, but it wasn't until Friday that investors got a chance to buy into the company's hot IPO. Friday's rocky trading wasn't going to rain on MercadoLibre's parade. Spanish for Free Market, MercadoLibre priced its Wall Street debut at $18 a share. The stock opened at $22 before barreling toward a $28.50 close. The company is profitable, growing quickly, and is nearly everything that you would want in an aggressive growth company. But before you dive in quicker than you can say "si," let's take a look at the good, the bad, and the bubbly. If you're a fan of eBay but find yourself souring on the marketplace's slow growth lately, MercadoLibre is a potent elixir. Revenues have more than quadrupled since 2004 to $52.1 million last year.
The company turned profitable last year and has been pumping up its operating margins ever since. Last year's operating margins of 10.4% may not seem all that inspiring. It's less than half of the 23.8% operating margins sported by eBay in 2006. But keep in mind that MercadoLibre is still early in its growth cycle. If you want to stack this up against eBay, you have to go back to 1998 when eBay generated $86.1 million in revenues on operating margins of 14.9%. Oh, and margins at MercadoLibre improved to a healthier 17.7% in this year's first quarter. Like eBay, MercadoLibre has its own online payment platform. And also like eBay's own PayPal, Mercado Pago is growing quicker than the company's marketplace revenues. Auction listing fees, final value fees, and optional features now account for 85% of total revenue at the company. MercadoLibre made its debut in Argentina eight years ago this month, but it now has a presence in 12 different Latin American countries. Given its sheer size, it's not a surprise to see that Brazil accounts for 59% of the company's business. With some countries in the area commanding Internet penetration rates at half of the Stateside adoption rate of roughly 70%, it's easy to fathom the upside of being a leader in regions that will only continue to get more connected in the coming years. MercadoLibre served as the middleman to more than $1 billion in gross merchandise value transactions last year, and that figure excludes big ticket items like cars and real estate. In 2006, the company watched over 1.7 million unique sellers, 4.4 million buyers, and produced 13.8 million successful auctions. That may not seem like much compared to the $52.5 billion in gross merchandise value that eBay facilitated last year, but things are just starting to heat up at MercadoLibre.