Investment Advisor Exits $47.5 Million MercadoLibre Position, According to Latest SEC Filing

RWC Asset Advisors fully exited its MercadoLibre position in Q1, selling 24,608 shares for an estimated $47.47 million and reducing the stake from 9.4% of AUM to 0%. The quarter-end position value fell by $49.57 million, reflecting both the sale and share-price movement. While the article notes MercadoLibre’s 45% recent-quarter revenue growth, the main signal is a significant institutional liquidation rather than a fundamental surprise.

Analysis

This is less a generic de-risking than a strong signal that one of the more quality-sensitive holders decided the market is now discounting MELI as if margin compression were structural, not cyclical. That matters because the exit came after a period where growth still screened well, so the marginal seller is likely reacting to the stock’s failure to re-rate despite continued top-line expansion. In the near term, that can keep multiple expansion capped: when a large holder goes to zero, it often removes a natural bid and leaves the stock more exposed to any earnings miss or guidance nuance.

The bigger second-order effect is on sentiment across LATAM growth/fintech. MELI is the region’s “proof of concept” for profitable platform scale; if investors decide even MELI should trade on slower margin recovery, it raises the hurdle rate for other EM consumer/internet names and supports relative value in commodity-linked Latin America exposures that are already favored in the fund’s book. For MELI itself, the key battle is whether logistics investment is seen as temporary capex drag or as a permanent reset in return expectations; that framing determines whether the recent drawdown is a pause or the start of a de-rating regime.

Contrarianly, a full exit after a 16% annual drawdown may be late rather than prescient. If operating margin stabilizes even modestly over the next 1-2 quarters, the stock can re-rate quickly because the market is already leaning heavily on the downside narrative. The setup is asymmetric around earnings: a clean beat with evidence of operating leverage can trigger a sharp squeeze, while any sign that growth is still being bought at the expense of profitability likely produces another leg lower.

Key Decisions for Investors

• Maintain a tactical underweight in MELI into the next earnings print; use rallies toward the prior support/recent VWAP as opportunities to fade, with a 4-8 week horizon and tight risk if margin commentary improves.
• For growth-in-LATAM exposure, prefer relative longs in commodity-linked names already supported by positioning (e.g., SQM/PBR basket) versus MELI; the trade benefits if investors continue preferring cash-yielding EM assets over high-investment growth.
• Buy MELI upside only via calls, not stock: consider 1-2 month call spreads funded by downside put sales only after confirmation that margins have bottomed, since the binary catalyst is earnings and implied vol should stay elevated.
• Pair trade: short MELI vs long NDAQ on a 1-3 month horizon if the market keeps rewarding durable monetization/asset-light economics over reinvestment-heavy platform growth; the relative valuation gap should widen if MELI guidance remains capex-heavy.