How will the secondary offering affect DLO's share price and liquidity in the short term?

Impact on price

A secondary‑offering of 15 MM Class A shares—≈10 % of DLO’s current float—creates a sudden supply of stock that the market must absorb. Because the Company itself receives no proceeds, there is no immediate corporate‑use catalyst to offset the dilution‑‑a pure “sell‑to‑the‑market” event. In practice this tends to generate short‑term downward pressure. History and the broader market’s reaction to comparable offerings suggest a 2 %‑4 % dip in the days surrounding the pricing and first trades, especially if the pricing is at a discount to the prior close (typical for secondary offerings).

Impact on liquidity

The offering expands the free‑float dramatically, tightening the bid/ask spread and raising daily average volume. Market‑makers will increase their inventory to meet the added supply, so the additional shares should be absorbed with relatively modest price impact after the initial sell‑off. The higher float improves the ease of executing larger blocks and reduces the “cost‑to‑liquidate” for institutional holders, which in turn can lower price‑impact premiums on subsequent trades.

Trading take‑away

- Short‑term: Expect modest, sell‑side‑biased volatility; a quick‑sell‑off could push the ticker 2‑4 % lower.

- Medium‑term: Once the new supply is fully absorbed, the stock should settle near its pre‑offering level if the underlying fundamentals (payment‑platform growth, market share, revenue trajectory) remain intact.

- Action: Position on the dip if you have a bullish view on DLO’s fundamentals—e.g., add modest long or buy‑the‑dip after the initial sell‑pressure eases. Conversely, stay on the short side if you anticipate continued weakness or if the offering is priced well below recent trading levels. Monitor execution volume and any price reaction at the offering price as the first tranche trades, as these will confirm whether the market is absorbing the supply smoothly or whether deeper pressure is developing.