Nubank releases reserve of BDRs for debut on the stock exchange in December – Finance – Tecnoblog

O Nubank is about to make its debut on the New York (NYSE) and Brazil (B3) stock exchanges, but has already been distributing the so-called BDRs (Brazilian Depositary Receipts) free of charge for digital bank account holders through the program NuSocios. Now, whoever is interested in buying more shares of fintech can already reserve other “little pieces” for when the IPO takes place in December.


Nubank (Image: Disclosure)

This Wednesday (17) the BDRs’ reservation period begins. Bonds can be guaranteed exclusively through the Nubank app or through the NuInvest platforms. Interested parties have until December 7th to make a reservation.

But, after all, what is this BDR guy and what does he have to do with Nubank’s shares? One Brazilian Depositary Receipt represents a share, or a fraction thereof, of a company listed on a foreign exchange. However, they can be bought and sold on B3, thus including Brazilian investors.

It is a type of investment that behaves in the same way as stocks. These bonds go up and down in price according to market fluctuations and the supply and demand of the company’s securities. In the case of Nubank, BDRs are the only way to offer fintech shares here in Brazil.

“In the case of Nu Holdings (the leading company of the Nubank group), we will do something called double listing: we will be listed on the NYSE, the New York Stock Exchange, and on B3, the Brazilian Stock Exchange… For those who invest in Brazil, this means that, to invest in the IPO, it will be necessary to buy BDRs (Brazilian Depositary Receipts) from Nu here at B3.”

Nubank on company blog post.

Fintech is still not sure how much each BDR will represent from each share traded in New York. However, Nubank estimates that one of these bonds will be equivalent to 1/6 of a class A common share of Nu Holdings. However, this value will only be truly set on December 8th, the day before the BDRs reach B3.

What is the difference between NuSocios and the BDR reserve?

Nubank highlights that the NuSócios program, which started on November 9, allows the registration of digital bank customers to receive a single BDR for free when Nu Holdings’ IPO takes place.

Representation of the “little piece of Nubank” in fintech explanatory video (Image: Playback/ YouTube)
Representation of the “little piece of Nubank” in fintech explanatory video (Image: Playback/ YouTube)

However, this free BDR has its own rules and limitations. The title received in this way can only be traded 1 year after its issuance. Nubank considers NuSocios an “education program” about investments. “In the first 12 months, we want people to study the market, understand the risks and opportunities and then decide what to do with their BDR”, says fintech on its blog.

The BDRs that can be reserved today are not related to NuSócios. In other words, you don’t need to be part of the program to guarantee the titles. In addition, those who have already registered for the free BDR can also book others.

these assets do not have the 12 month restriction to be sold. They can normally be traded on the Stock Exchange after Nubank’s IPO. However, unlike the free title, you may need to declare these additional BDRs to the IRS.

During this reserve period, investors can inform how much they want to invest in Nubank’s holdings, but the value of each BDR is also not defined. This will only happen at the time of pricing, when Nu Holdings, NuInvest (the broker responsible for trading the BDRs in the IPO) and other financial advisors decide on the share price and the BDR. The value minimum booking is BRL 30, and the value maximum is BRL 300 thousand.

“When booking, people will be able to inform the maximum amount they are willing to pay for each BDR. At the end of pricing, if the value turns out to be higher than what you established, you will not participate in the IPO and your money will be returned to your account within three days.”

Nubank on company blog post.

Interested investors can reserve securities directly on the Nubank app or via fintech’s investment platform, NuInvest. In both cases, it is enough to identify the highlighted “IPO” area and follow the step by step to reserve the BDRs for the debut of Nu Holdings on the Stock Exchange.

With information: Nubank

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