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Why PagSeguro Stock Crashed Today
Key Points
CNBC reports that Lula beat Bolsonaro 51.8% to 48.2% in Brazil's 2026 presidential election.
Investors had bet Bolsonaro would win, and are upset by the result.
What goes up must come down -- and is PagSeguro (NYSE:PAGS) stock ever coming down fast today!
Shares of the Brazilian fintech stock and digital bank took off like a rocket earlier this month after conservative candidate Flávio Bolsonaro outpolled incumbent President Luiz Inácio Lula da Silva 47.3% to 44.8% in the first round of voting in Brazil's presidential election. But the second round of voting wrapped up last night, and "Lula" pulled off an upset, winning 51.8% of votes cast to Bolsonaro's 48.2%.
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Investors are upset, and they're taking it out on every Brazil-related stock they can find. PagSeguro stock is down 26.4% as of 11:20 a.m. ET.
Image source: Getty Images.
Election Brazil 2026
Bolsonaro is refusing to concede defeat and is challenging the election results, alleging the incumbent administration suppressed voting in key Bolsonaro-leaning districts. It's not clear whether the allegations have merit or have any chance of overturning yesterday's results, however.
Actually, the opposite seems more likely. Various South American heads of state have already made their calls to congratulate Lula on his victory.
What does any of this have to do with PagSeguro?
When Bolsonaro seemed to be winning earlier this month, The Wall Street Journal reported that investors were upset with Lula's "stewardship of the economy" and hoped a change in administration might help shore up Brazilian finances, lower debt and tax costs, and generally improve the business climate. That no longer seems likely, and Lula will probably now remain in office through 2030.
This doesn't necessarily make PagSeguro stock a sell, however. Valued at just 7.7 times trailing earnings and expected by Wall Street analysts to grow earnings more than 10% annually over the next five years, PagSeguro stock looks cheap -- regardless of who wins the Brazilian election.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.