dLocal: Refuting Short-Seller Allegations and Reaffirming Independent Investigations

dLocal Limited (Nasdaq: DLO), a leading technology-first payments platform enabling global enterprise merchants to connect with billions of consumers in emerging markets, has strongly refuted allegations made in a recent short-seller report. The company maintains that the allegations are inaccurate and misleading, made by interested parties who profit from the Company’s stock price falling.

In a press release issued on February 20, 2025, dLocal emphasized its commitment to high standards of corporate governance, financial integrity, and regulatory compliance. The company encourages investors to rely on its audited financial statements and disclosures filed with the SEC, rather than on self-serving and inaccurate reports from short-sellers with a clear financial incentive to cause short-term volatility in the stock price.



dLocal's response to the short-seller allegations is a significant corporate governance event that demands careful scrutiny. The company's robust defense rests on three important pillars: independent director oversight, external forensic accounting expertise, and previously completed investigations that found no substance to similar allegations.

Several key elements deserve particular attention:

1. The audit committee's composition of solely independent directors adds substantial credibility to their oversight of the investigation process.
2. The engagement of both independent counsel and a global forensic accounting firm suggests a comprehensive approach to addressing these concerns.
3. The timing of this response, just days before the February 27 earnings call, indicates a strategic move to address market concerns before presenting financial results.

The company's emphasis on SEC-filed audited financials as the primary source of truth serves dual purposes: it reinforces their commitment to regulatory compliance while implicitly challenging the credibility of short-seller reports. This stance is particularly relevant for emerging market payment companies, which often face heightened scrutiny due to their complex cross-border operations and regulatory environments.

The upcoming earnings call on February 27 takes on heightened significance as it will provide management an opportunity to address these allegations with concrete financial data and operational metrics. Investors should focus on several key areas during this presentation:

1. Detailed explanations of any questioned transactions or business relationships
2. Updates on internal control mechanisms and compliance frameworks
3. Clarity on cross-border payment flows and regulatory compliance
4. Evidence of sustainable merchant relationships and transaction volumes

While the company's defense appears comprehensive, the repeated targeting by short-sellers suggests a need for enhanced transparency in certain operational areas. The effectiveness of their response will largely depend on their ability to provide concrete evidence during the upcoming earnings call that substantiates their position and reinforces investor confidence in their business model and financial reporting.

In conclusion, dLocal's response to the short-seller allegations demonstrates a strong commitment to corporate governance, transparency, and investor confidence. As the company prepares to discuss its FY24 and Q4'24 performance and outlook during the upcoming earnings call, investors should closely monitor the presentation and the company's ability to address market concerns effectively.